Burger King versus McDonalds

Burger King, often abbreviated as BK, is a global chain of hamburger fast food
restaurants headquartered in unincorporated Miami-Dade County, Florida, United States.
History
The company began in 1953 as Insta-Burger King, a Jacksonville, Florida-based restaurant chain. After
Insta-Burger King ran into financial difficulties in 1954, its two Miami-based franchisees, David
Edgerton and James McLamore, purchased the company and renamed it Burger King. Over the next half
century, the company would change hands four times, with its third set of owners, a partnership of TPG
Capital, Bain Capital, and Goldman Sachs Capital Partners, taking it public in 2002. In late 2010, 3G
Capital of Brazil acquired a majority stake in BK in a deal valued at US$3.26 billion. The new owners
promptly initiated a restructuring of the company to reverse its fortunes.
Franchises
At the end of fiscal year 2013, Burger King reported it had over 13,000 outlets in 79 countries; of these,
66 percent are in the United States and 99 percent are privately owned and operated with its new owners
moving to an entirely franchised model in 2013. BK has historically used several variations
of franchising to expand its operations. The manner in which the company licenses its franchisees varies
depending on the region, with some regional franchises, known as master franchises, responsible for
selling franchise sub-licenses on the company's behalf. Burger King's relationship with its franchises has
not always been harmonious. Occasional conflicts have caused numerous issues, and in several
instances the company's and its licensees' relations have degenerated into precedent-setting court cases.
Menu
The Burger King menu has expanded from a basic offering of burgers, French fries, sodas, and
milkshakes in 1954, to a larger, more diverse set of product offerings. In 1957, the Whopper was the first
major addition to the menu; it has since become Burger King's signature product. Conversely, BK has
introduced many products which failed to catch hold in the marketplace. Some of these failures in the
United States have seen success in foreign markets, where BK has also tailored its menu for regional
tastes. From 2002 to 2010, Burger King aggressively targeted the 1834 male demographic with larger
products that often carried correspondingly large amounts of unhealthy fats and trans-fats. This tactic
would eventually come to hurt the company's financial underpinnings and cast a negative pall on its
earnings. Beginning in 2011, the company began to move away from the previous male-oriented menu
and introduce new menu items, product reformulations, and packaging as part of 3G Capital's
restructuring plans of the company.
Advertising
The 1970s were the "Golden Age" of Burger King advertising, but beginning in the early 1980s, the
company's advertising began to lose focus; a series of less successful ad campaigns created by a
procession of advertising agencies continued for the next two decades. In 2003, Burger King hired the
Miami-based advertising agency of Crispin Porter + Bogusky (CP+B). CP+B completely reorganized
Burger King's advertising with a series of new campaigns centered on a redesigned Burger King
character accompanied with a new online presence. While highly successful, some of CP+B commercials
were derided for perceived sexism or cultural insensitivity. New owner, 3G Capital, terminated the
relationship with CP+B in 2011 and moved its advertising to McGarryBowen to begin a new product
oriented campaign with expanded demographic targeting.
Equipment
The predecessor to Burger King was founded in 1953 in Jacksonville, Florida, as Insta-Burger King. After
visiting the McDonald brothers' original store location in San Bernardino, California, the founders and
owners (Keith J. Kramer and his wife's uncle Matthew Burns) purchased the rights to two pieces of
equipment called "Insta" machines and opened their first restaurants, based around a cooking device
called an Insta-Broiler. The Insta-Broiler oven proved so successful at cooking burgers, they required all
of their franchises to use the device. After the company faltered in 1959, it was purchased by its Miami,
Florida franchisees, James McLamore and David R. Edgerton. They initiated a corporate restructuring of
the chain, first renaming the company Burger King. They ran the company as an independent entity for
eight years (eventually expanding to over 250 locations in the United States), before selling it to
the Pillsbury Company in 1967. When McLamore and Edgerton took over the company, besides dropping
the "Insta-" prefix, they switched to an improved unit, which they called a "Flame Broiler". Designed by the
two and featuring stationary burners that cooked the meat on a moving chain, the unit broke down less
often, while maintaining a similar cooking rate.
[123]
The company would stay with that format for the next
40 years until Burger King began developing a variable speed broiler that could handle multiple items with
different cooking rates and times.
[146][147][148]
These new units began testing in 1999 and eventually
evolved into the two models the company deployed system-wide in 20082009. Accompanying these
new broilers was new food-holding equipment, accompanied with a computer-based product monitoring
system for its cooked products.
[149]
The monitoring system allows for more concise tracking of product
quality, while giving the company and its franchisees a method to streamline costs by more precisely
projecting sales and product usage.
[150]


Restructuring
Pillsbury management tried several times to restructure Burger King in the late 1970s and early 1980s.
The most prominent change came in 1978, when Burger King hired McDonald's executive Donald N.
Smith to help revamp the company. In a plan called Operation Phoenix, Smith restructured corporate
business practices at all levels of the company. Changes included updated franchise agreements, a
broader menu, and new, standardized restaurant designs. Smith left Burger King for PepsiCo in 1980,
shortly before a system-wide decline in sales. Pillsbury Executive Vice President of Restaurant
Operations Norman E. Brinker was tasked with turning the brand around and strengthening its position
against its main rival, McDonald's. One of his initiatives was a new advertising campaign featuring a
series of attack ads against its major competitors. This campaign started a competitive period between
the top burger chains, known as the Burger Wars. Brinker left Burger King in 1984, to take over Dallas-
based gourmet burger chain Chili's.
Smith and Brinker's efforts were initially effective, but, after their respective departures, Pillsbury relaxed
or discarded many of their changes and scaled back on construction of new locations. These actions
stalled corporate growth and sales declined again, eventually resulting in a damaging fiscal slump for
Burger King and Pillsbury. Poor operation and ineffectual leadership continued to bog down the company
for many years. Pillsbury was acquired by the British entertainment conglomerate Grand Metropolitan in
1989.
Initially Grand Met attempted to bring the chain top profitability under newly minted CEO Barry Gibbons,
the changes he initiated during his two-year tenure were hit or miss. Successful new product introductions
and product tie-ins with the Walt Disney company, were offset by continuing image problems and
ineffectual advertising programs. Additionally, Gibbons sold off several of the company's assets in attempt
to profit from their sale and terminated many staff members. After Gibbon's departure, a series of CEO
each tried to repair the brand by changing the menu, bringing in new ad agencies and other changes.
The parental disregard of the Burger King brand continued through Grand Metropolitan's merger with
Guinness in 1997, when the two organizations formed the new holding company Diageo. Eventually, the
ongoing, systematic institutional neglect of the brand through the string of owners damaged the company
to the point where major franchises were driven out of business and its total value was significantly
decreased. Diageo eventually decided to divest itself of the money-losing chain and put the company up
for sale in 2000.

Change in Ownership
The twenty-first century saw the company return to independence when it was purchased from Diageo by
a group of investment firms led by TPG Capital for US$1.5 billion in 2002. The new owners rapidly moved
to revitalize and reorganize the company, culminating with the company being taken public in 2006 with a
highly successful initial public offering. The firms' strategy for turning the chain around included a new
advertising agency and new ad campaigns, a revamped menu strategy, a series of programs designed to
revamp individual stores, a new restaurant concept called the BK Whopper Bar, and a new design format
called 20/20. These changes successfully re-energized the company, leading to a score of profitable
quarters. Yet, despite the successes of the new owners, the effects of the financial crisis of 2007
2010 weakened the company's financial outlooks while those of its immediate competitor McDonald's
grew. The falling value of Burger King eventually led to TPG and its partners divesting their interest in the
chain in a US$3.26 billion sale to 3G Capital of Brazil. Analysts from financial firms UBS and Stifel
Nicolaus agreed that 3G would have to invest heavily in the company to help reverse its fortunes. After
the deal was completed, the company's stock was removed from the New York Stock Exchange, ending a
four-year period as a public company. The delisting of its stock was designed to help the company repair
its fundamental business structures and continue working to close the gap with McDonald's without
having to worry about pleasing shareholders. In the United States domestic market, the chain has fallen
to third place in terms of same store sales behind Ohio-based Wendy's. The decline is the result of 11
consecutive quarters of same store sales decline

Burger King Holdings
Burger King Holdings is the parent company of Burger King, also known as Burger King Corporation and
abbreviated BKC, and is a Delaware corporation formed on 23 July 2002. A publicly company, it derives
its income from several sources, including property rental and sales through company owned restaurants;
however a substantial portion of its revenue is dependent on franchise fees. The company operates
approximately 40 subsidiaries globally that oversee franchise operations, acquisitions and financial
obligations such as pensions. One example of a subsidiary is Burger King Brands, Inc. which is
responsible for the management of Burger King's intellectual properties. A wholly owned subsidiary
established in 1990, Burger King Brands owns and manages all trademarks, copyrights and domain
names used by the restaurants in the United States and Canada. It is also responsible for providing
marketing and related services to the parent company.
Head Quarters
Burger King is headquartered in a nine-story office tower by the Miami International
Airport in unincorporated Miami-Dade County, Florida. Elaine Walker of the Miami Herald stated that the
headquarters has a "Burger King" sign that drivers on State Road 836 "can't miss." In addition the chain
planned to build a neon sign on the roof to advertise the brand to passengers landing at the airport. On
Monday 8 July 2002, 130 employees began working at the Burger King headquarters with the remainder
moving in phases in August 2002. Prior to the moving to its current headquarters in 2002, Burger King
had considered moving away from the Miami area; Miami-Dade County politicians and leaders lobbied
against this, and Burger King stayed.





Financials
Revenue US$1.97 billion (FY 2012)
Operating income US$363.0 million (FY 2012)
Net income US$117.7 million (FY 2012)
Total assets US$5.564 billion (FY 2012)
Total equity US$1.175 billion (FY 2012)
Owner(s)
3G Capital (71%)
Justice Founders (13%)
Shareholders (16%)
[4]

Employees 34,248 (FY 2011)


The McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving
around 68 million customers daily in 119 countries across 35,000 outlets.
History & Background
Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated
by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using
production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He
subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.
The business began in 1940, with a restaurant opened by brothers Richard and Maurice McDonald at
1398 North E Street at West 14th Street in San Bernardino, California (at 34.1255N 117.2946W). Their
introduction of the "Speedee Service System" in 1948 furthered the principles of the modern fast-food
restaurant that the White Castle hamburger chain had already put into practice more than two decades
earlier. The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped
head whose name was "Speedee". Speedee was eventually replaced with Ronald McDonald by 1967
when the company first filed a U.S. trademark on a clown shaped man having puffed out costume legs.
McDonald's first filed for a U.S. trademark on the name "McDonald's" on May 4, 1961, with the description
"Drive-In Restaurant Services", which continues to be renewed through the end of December 2009. In the
same year, on September 13, 1961, the company filed a logo trademark on an overlapping, double
arched "M" symbol. The overlapping double arched "M" symbol logo was temporarily disfavored

by
September 6, 1962, when a trademark was filed for a single arch, shaped over many of the early
McDonald's restaurants in the early years. Although the "Golden Arches" appeared in various forms, the
present form as a letter "M" did not appear until November 18, 1968, when the company applied for a
U.S. trademark.
The present corporation dates its founding to the opening of a franchised restaurant by Czech
American businessman Ray Kroc, in Des Plaines, Illinois, on April 15, 1955, the ninth McDonald's
restaurant overall. Kroc later purchased the McDonald brothers' equity in the company and led its
worldwide expansion, and the company became listed on the public stock markets in 1965. Kroc was also
noted for aggressive business practices, compelling the McDonald brothers to leave the fast food
industry. The McDonald brothers and Kroc feuded over control of the business, as documented in both
Kroc's autobiography and in the McDonald brothers' autobiography. The San Bernardino store was
demolished in 1976 (or 1971, according to Juan Pollo) and the site was sold to the Juan Pollo restaurant
chain. It now serves as headquarters for the Juan Pollo chain, as well as a McDonald's and Route 66
museum. With the expansion of McDonald's into many international markets, the company has become a
symbol of globalization and the spread of the American way of life. Its prominence has also made it a
frequent topic of public debates about obesity, corporate ethics and consumer responsibility.

Headquarters
The McDonald's headquarters complex, McDonald's Plaza, is located in Oak Brook, Illinois. It sits on the
site of the former headquarters and stabling area of Paul Butler, the founder of Oak Brook.
[13]
McDonald's
moved into the Oak Brook facility from an office within the Chicago Loop in 1971.
Operations & Products
A McDonald's restaurant is operated either by a franchisee, an affiliate, or the corporation itself.
McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well
as sales in company-operated restaurants. In 2012, McDonald's Corporation had annual revenues of
$27.5 billion, and profits of $5.5 billion.
McDonald's primarily sells hamburgers, cheeseburgers, chicken, french fries, breakfast items, soft
drinks, milkshakes, and desserts. In response to changing consumer tastes, the company has expanded
its menu to include salads, fish, wraps, smoothies, fruit, and seasoned fries.
McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products, French
fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's
offers salads and vegetarian items, wraps and other localized fare. On a seasonal basis, McDonald's
offers the McRib sandwich. Some speculate the seasonality of the McRib adds to its appeal.
[15]
Various
countries, especially in Asia, are currently serving soup. This local deviation from the standard menu is a
characteristic for which the chain is particularly known, and one which is employed either to abide by
regional food taboos (such as the religious prohibition of beef consumption in India) or to make available
foods with which the regional market is more familiar (such as the sale of McRice in Indonesia, or Ebi
(prawn) Burger in Singapore). In Germany and other Western European countries, McDonald's sells beer.
In New Zealand, McDonald's sells meat pies, after the local affiliate partially re-launched the Georgie
Pie fast food chain it bought out in 1996.
Facts and figures
McDonald's restaurants are found in 118 countries and territories around the world and serve 68 million
customers each day. McDonald's operates over 35,000 restaurants worldwide, employing more than 1.7
million people. The company also operates other restaurant brands, such as Piles Caf.
Focusing on its core brand, McDonald's began divesting itself of other chains it had acquired during the
1990s. The company owned a majority stake in Chipotle Mexican Grilluntil October 2006, when
McDonald's fully divested from Chipotle through a stock exchange. Until December 2003, it also
owned Donatos Pizza. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.
Notably, McDonald's has increased shareholder dividends for 25 consecutive years, making it one of
the S&P 500 Dividend Aristocrats. In October 2012, its monthly sales fell for the first time in nine years.

Types of restaurants
Most standalone McDonald's restaurants offer both counter service and drive-through service, with indoor
and sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and Drive, or "McDrive" as it is known in
many countries, often has separate stations for placing, paying for, and picking up orders, though the
latter two steps are frequently combined; it was first introduced in Arizona in 1975, following the lead of
other fast-food chains. The first such restaurant in Britain opened at Fallowfield, Manchester in 1986.
In some countries, "McDrive" locations near highways offer no counter service or seating. In contrast,
locations in high-density city neighborhoods often omit drive-through service. There are also a few
locations, located mostly in downtown districts that offer Walk-Thru service in place of Drive-Thru.
To accommodate the current trend for high quality coffee and the popularity of coffee shops in general,
McDonald's introduced McCaf, a caf-style accompaniment to McDonald's restaurants in the style
of Starbucks. McCaf is a concept created by McDonald's Australia, starting with Melbourne in 1993.
Today, most McDonald's in Australia have McCafs located within the existing McDonald's restaurant.
In Tasmania, there are McCafs in every store, with the rest of the states quickly following suit. After
upgrading to the new McCaf look and feel, some Australian stores have noticed up to a 60% increase in
sales. As of the end of 2003 there were over 600 McCafs worldwide.
Some locations are connected to gas stations/convenience stores, while others called McExpress have
limited seating and/or menu or may be located in a shopping mall. Other McDonald's are located
in Walmart stores. McStop is a location targeted at truckers and travelers which may have services found
at truck stops.
Since 1997, in addition to many in Israel, one kosher McDonald's is located in the Abasto mall, in Buenos
Aires, Argentina.

Global operations

McDonald's has become emblematic of globalization, sometimes referred to as the "McDonaldization" of
society. The Economist newspaper uses the "Big Mac Index": the comparison of a Big Mac's cost in
various world currencies can be used to informally judge these currencies' purchasing power parity.
Norway has the most expensive Big Mac in the world as of July 2011, while the country with the least
expensive Big Mac is India (albeit for a Maharaja Macthe next cheapest Big Mac is Hong Kong).

Thomas Friedman once said that no country with a McDonald's had gone to war with another. However,
the "Golden Arches Theory of Conflict Prevention" is not strictly true. Exceptions are the 1989 United
States invasion of Panama, NATO's bombing of Serbia in 1999, the 2006 Lebanon War, and the 2008
South Ossetia war. McDonald's suspended operations in its corporate-owned stores in Crimea after
Russia annexed the region in 2014.
Some observers have suggested that the company should be given credit for increasing the standard of
service in markets that it enters. A group of anthropologists in a study entitled Golden Arches East

looked
at the impact McDonald's had on East Asia, and Hong Kong in particular. When it opened in Hong Kong
in 1975, McDonald's was the first restaurant to consistently offer clean restrooms, driving customers to
demand the same of other restaurants and institutions. McDonald's has taken to partnering up
with Sinopec, the second largest oil company in the People's Republic of China, as it takes advantage of
the country's growing use of personal vehicles by opening numerous drive-thru restaurants. McDonald's
has opened a McDonald's restaurant and McCaf on the underground premises of the French fine
arts museum, The Louvre. The company stated it will open vegetarian-only restaurants in India by mid-
2013.

Playgrounds

Some McDonald's in suburban areas and certain cities feature large indoor or outdoor playgrounds. The
first PlayPlace with the familiar crawl-tube design with ball pits and slides was introduced in 1987 in the
USA, with many more being constructed soon after. Some PlayPlace playgrounds have been renovated
into "R Gym" areas.

In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of its restaurants, the first
major redesign since the 1970s. McDonald's has invested $1 billion to redesign nearly all of the 14,000
restaurants by 2015.
The goal of the redesign is to be more like a coffee shop, similar to Starbucks. The design includes
wooden tables, faux-leather chairs, and muted colors; the red was muted to terra cotta, the yellow was
turned golden for a more "sunny" look, and olive and sage green were also added. To warm up its look,
the restaurants have less plastic and more brick and wood, with modern hanging lights to produce a
softer glow. Many restaurants now feature free Wi-Fi and flat screen TVs. Other upgrades include double
drive-thrus, flat roofs instead of the angled red roofs, and replacing fiber glass with wood. Also, instead of
the familiar golden arches, the restaurants now feature "semi-swooshes" (half of a golden arch), similar to
the Nike swoosh.

Business model
McDonald's Corporation earns revenue as an investor in properties, a franchiser of restaurants, and an
operator of restaurants. Approximately 15% of McDonald's restaurants are owned and operated by
McDonald's Corporation directly. The rest are operated by others through a variety of franchise
agreements and joint ventures.
The McDonald's Corporation's business model is slightly different from that of most other fast-food chains.
In addition to ordinary franchise fees and marketing fees, which are calculated as a percentage of sales,
McDonald's may also collect rent, which may also be calculated on the basis of sales. As a condition of
many franchise agreements, which vary by contract, age, country, and location, the Corporation may own
or lease the properties on which McDonald's franchises are located. In most, if not all cases, the
franchisee does not own the location of its restaurants.
The United Kingdom and Ireland business model is different from the U.S, in that fewer than 30% of
restaurants are franchised, with the majority under the ownership of the company. McDonald's trains its
franchisees and others at Hamburger University in Oak Brook, Illinois.
In other countries, McDonald's restaurants are operated by joint ventures of McDonald's Corporation and
other, local entities or governments.
As a matter of policy, McDonald's does not make direct sales of food or materials to franchisees, instead
organizing the supply of food and materials to restaurants through approved third party logistics
operators.
According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers in the U.S. have at
some time been employed by McDonald's. The book also states that McDonald's is the largest private
operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, potatoes,
and apples. The selection of meats McDonald's uses varies to some extent based on the culture of the
host country.


Advertising
McDonald's has for decades maintained an extensive advertising campaign. In addition to the usual
media (television, radio, and newspaper), the company makes significant use of billboards and signage,
sponsors sporting events ranging from Little League to the Olympic Games, and makes coolers of orange
drink with its logo available for local events of all kinds. Nonetheless, television has always played a
central role in the company's advertising strategy.
To date, McDonald's has used 23 different slogans in United States advertising, as well as a few other
slogans for select countries and regions. At times, it has run into trouble with its campaigns.

Space exploration
McDonald's and NASA explored an advertising agreement for a planned mission to the asteroid 449
Hamburga; however, the spacecraft was eventually cancelled.

McHappy Day
McHappy Day is an annual event at McDonald's, where a percentage of the day's sales go to charity. It is
the signature fundraising event for Ronald McDonald House Charities.
In 2007, it was celebrated in 17 countries: Argentina, Australia, Austria, Brazil, Canada, the United
States, Finland, France, Guatemala, Hungary, England, Ireland, New
Zealand, Norway, Sweden, Switzerland andUruguay.
According to the Australian McHappy Day web site, McHappy Day raised $20.4 million in 2009. The goal
for 2010 was $20.8 million.
McDonald's Monopoly donation to St. Jude
In 1995, St. Jude Children's Research Hospital received an anonymous letter postmarked in Dallas,
Texas, containing a $1 million winning McDonald's Monopoly game piece. McDonald's officials came to
the hospital, accompanied by a representative from the accounting firm Arthur Andersen, who examined
the card under a jeweler's eyepiece, handled it with plastic gloves, and verified it as a winner. Although
game rules prohibited the transfer of prizes, McDonald's waived the rule and has made the annual
$50,000 annuity payments, even after learning that the piece was sent by an individual involved in an
embezzlement scheme intended to defraud McDonald's (see McDonald's Monopoly).
Criticism
As a prominent example of the rapid globalization of the American fast food industry, McDonald's is often
the target of criticism for its menu, its expansion, and its business practices. The McLibel Trial, also
known as McDonald's Restaurants v Morris & Steel, is an example of this criticism. In 1990, activists from
a small group known as London Greenpeace (no connection to the international group Greenpeace)
distributed leaflets entitled What's wrong with McDonald's?, criticizing its environmental, health, and labor
record. The corporation wrote to the group demanding they desist and apologize, and, when two of the
activists refused to back down, sued them for libel in one of the longest cases in British civil law. A
documentary film of the McLibel Trial has been shown in several countries.
Despite the objections of McDonald's, the term "McJob" was added to Merriam-Webster's Collegiate
Dictionary in 2003. The term was defined as "a low-paying job that requires little skill and provides little
opportunity for advancement".
In 2001, Eric Schlosser's book Fast Food Nation included criticism of the business practices of
McDonald's. Among the critiques were allegations that McDonald's (along with other companies within the
fast food industry) uses its political influence to increase its profits at the expense of people's health and
the social conditions of its workers. The book also brought into question McDonald's advertisement
techniques in which it targets children. While the book did mention other fast-food chains, it focused
primarily on McDonald's.
In 2002, vegetarian groups, largely Hindu and Buddhist, successfully sued McDonald's for
misrepresenting its French fries as vegetarian, when they contained beef broth.
Morgan Spurlock's 2004 documentary film Super Size Me said that McDonald's food was contributing to
the epidemic of obesity in society, and that the company was failing to provide nutritional information
about its food for its customers. Six weeks after the film premiered, McDonald's announced that it was
eliminating the supersize option, and was creating the adult Happy Meal.
In January 2014 it was reported that McDonald's was accused of having used a series of tax maneuvers
to avoid paying its fair share of taxes in France. The company confirmed that tax authorities had visited
McDonalds French headquarters in Paris but insisted that it had not done anything wrong, saying,
McDonalds firmly denies the accusation made by LExpress according to which McDonalds supposedly
hid part of its revenue from taxes in France.

Arguments in defense
In response to public pressure, McDonald's has sought to include more healthy choices in its menu and
has introduced a new slogan to its recruitment posters: "Not bad for a McJob". (The word McJob, first
attested in the mid-1980s and later popularized by Canadian novelist Douglas Coupland in his
book Generation X, has become a buzz word for low-paid, unskilled work with few prospects or benefits
and little security.) McDonald's disputes this definition of McJob. In 2007, the company launched an
advertising campaign with the slogan "Would you like a career with that?" on Irish television, outlining that
its jobs have many prospects.
In an effort to respond to growing consumer awareness of food provenance, the fast-food chain changed
its supplier of both coffee beans and milk. UK chief executive Steve Easterbrook said: "British consumers
are increasingly interested in the quality, sourcing and ethics of the food and drink they buy". In a bid to
tap into the ethical consumer market, McDonald's switched to using coffee beans taken from stocks that
are certified by the Rainforest Alliance, a conservation group. Additionally, in response to pressure,
McDonald's UK started using organic milk supplies for its bottled milk and hot drinks, although it still uses
conventional milk in its milkshakes, and in all of its dairy products in the United States. According to a
report published by Farmers Weekly in 2007, the quantity of milk used by McDonald's could have
accounted for as much as 5% of the UK's organic milk output.
McDonald's announced on May 22, 2008 that, in the United States and Canada, it would switch to using
cooking oil that contains no trans fats for its french fries, and canola-based oil with corn and soy oils, for
its baked items, pies and cookies, by year's end.
With regard to acquiring chickens from suppliers who use CAK or CAS methods of slaughter, McDonald's
says that it needs to see more research "to help determine whether any CAS system in current use is
optimal from an animal welfare perspective."

Environmental record
In April 2008, McDonald's announced that 11 of its Sheffield, England restaurants have been using a
biomass trial that had cut its waste and carbon footprint by half in the area. In this trial, wastes from the
restaurants were collected by Veolia Environmental Services, and were used to produce energy at a
power plant. McDonald's plans to expand this project, although the lack of biomass power plants in the
United States will prevent this plan from becoming a national standard anytime soon. In addition, in
Europe, McDonald's has been recycling vegetable grease by converting it to fuel for its diesel trucks.
Furthermore, McDonald's has been using a corn-based bioplastic to produce containers for some of its
products. Although industries who use this product claim a carbon savings of 30% to 80%,
a Guardian study shows otherwise. The results show that this type of plastic does not break down in
landfills as efficiently as other conventional plastics. The extra energy it takes to recycle this plastic results
in a higher output of greenhouse gases. Also, the plastics can contaminate waste streams, causing other
recycled plastics to become un-saleable.
In 1990 McDonald's worked with the Environmental Defense Fund to stop using "clam shell"
shaped styrofoam food containers to house its food products. 20 years later McDonald's announced they
would try replacing styrofoam coffee cups with an alternative material.
The U.S. Environmental Protection Agency has recognized McDonald's continuous effort to reduce solid
waste by designing more efficient packaging and by promoting the use of recycled-content materials.
McDonald's reports that it is committed towards environmental leadership by effectively managing electric
energy, by conserving natural resources through recycling and reusing materials, and by addressing
water management issues within the restaurant.
In an effort to reduce energy usage by 25% in its restaurants, McDonald's opened a prototype restaurant
in Chicago in 2009 with the intention of using the model in its other restaurants throughout the world.
Building on past efforts, specifically a restaurant it opened in Sweden in 2000 that was the first to
intentionally incorporate green ideas, McDonald's designed the Chicago site to save energy by
incorporating old and new ideas such as managing storm water, using skylights for more natural lighting
and installing some partitions and tabletops made from recycled goods.
When McDonalds received criticism for its environmental policies in the 1970s, it began to make
substantial progress towards source reductions efforts. For instance, an average meal in the 1970sa
Big Mac, fries, and a drinkrequired 46 grams of packaging; today, it requires only 25 grams, allowing a
46% reduction. In addition, McDonalds eliminated the need for intermediate containers for cola by having
a delivery system that pumps syrup directly from the delivery truck into storage containers, saving two
million pounds of packaging annually. Overall, weight reductions in packaging and products, as well as
the increased usage of bulk packaging ultimately decreased packaging by 24 million pounds annually.
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Legal cases
McDonald's has been involved in a number of lawsuits and other legal cases, most of which
involved trademark disputes. The company has threatened many food businesses with legal action
unless it drops the Mc or Mac from trading names. In one noteworthy case, McDonald's sued a Scottish
caf owner called McDonald, even though the business in question dated back over a century (Sheriff
Court Glasgow and Strathkelvin, November 21, 1952). On September 8, 2009, McDonald's Malaysian
operations lost a lawsuit to prevent another restaurant calling itself McCurry. McDonald's lost in an appeal
to Malaysia's highest court, the Federal Court.
It has also filed numerous defamation suits. For example, in the McLibel case, McDonald's sued two
activists for distributing pamphlets attacking its environmental, labor and health records. After the longest
trial in UK legal history, the judge found that some claims in the pamphlet were untrue and therefore
libelous. The company, however, had asserted that all claims in the pamphlet were untrue, essentially
obliging the judge to publicly rule on each one. A few of the specific allegations (specifically that
McDonald's was "culpably responsible" for animal cruelty, that it exploited children through its advertising,
and that it paid low wages) were found to be true.
McDonald's has defended itself in several cases involving workers' rights. In 2001, the company was
fined 12,400 by British magistrates for illegally employing and over-working child labor in one of its
London restaurants. This is thought to be one of the largest fines imposed on a company for breaking
laws relating to child working conditions (R v 2002 EWCA Crim 1094). In April 2007, in Perth, Western
Australia, McDonald's pleaded guilty to five charges relating to the employment of children under 15 in
one of its outlets and was fined A$8,000.
Possibly the most infamous legal case involving McDonald's was the 1994 decision in Liebeck v.
McDonald's Restaurants where Stella Liebeck was awarded several million dollars after she suffered
third-degree burns after spilling a scalding cup of McDonald's coffee on herself.
In a McDonald's American Idol figurine promotion, the figurine that represents "New Wave Nigel" wears
something that closely resembles Devos Energy dome, which was featured on the band's album
cover, Freedom of Choice. In addition to the figurine's image, it also plays a tune that appears to be an
altered version of Devo's song "Doctor Detroit". Devo copyrighted and trademarked the Energy Dome and
is taking legal action against McDonald's.

Use of genetically modified food
In April 2014, it was reported that McDonald's will use, in Europe, chicken meat which was produced by
using genetically modified animal feed, which it did not do since 2001. Greenpeace criticizes, that
McDonald's saves less than one Eurocent for each chicken burger and goes down a path not desired by
its customers.
Revenue
US$ 28.1057 billion (2013)
US$ 27.567 billion (2012)
Operating income
US$ 8.7643 billion (2013)
US$ 8.6046 billion (2012)
Net income
US$ 5.5859 billion (2013)
US$ 5.4648 billion (2012)
Total assets
US$ 36.6263 billion (2013)
US$ 35.3865 billion (2012)
Total equity
US$ 16.0097 billion (2013)
US$ 15.2936 billion (2012)
Employees 1,800,000 (2013)


QUESTIONS:
1. Carry out a TOWS Analysis for both Burger King and McDonalds
2. Construct a CPM
3. Develop SPACE Matrix for both organizations*

Submission & Presentation Date: 21
st
July (Monday)


















*You are allowed to make assumptions in the Financial Strength dimension wherever factual data is
not available.