Business Model Canvas For A Restaurant – With nearly 40,000 restaurants in more than 100 countries, McDonald’s business model relies primarily on the sale of McDonald’s products by their franchisees, who usually rent McDonald’s-owned real estate. The business model was first adopted by brothers Richard James and Maurice James McDonald, who sold their business to Ray Kroc, their first franchise, for $ 2.7 million. Back in 1961.
Launched in 1948, the Speedee service system is a leader in McDonald’s. It was run by two McDonald’s brothers who adopted the concept of driving in and the franchise for fast food distribution. Their first franchise agent was Ray Kroc, who opened the first McDonald’s franchise in 1955. He bought their business rights for $ 2.7 million in 1961 after seeing what their business and its business model could become.
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Through its business model and insistence on fast service delivery and consistent quality product delivery, by 2021 McDonald’s has become the most valuable QSR brand with a brand value of $ 154.9 billion and silver. Global revenue of $ 19.21 billion.
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While McDonald’s business model focuses on franchising, they also generate revenue in other ways. However, under the monopoly, they process three different types of it. They are:
Under this type of franchise, the franchisee invests their own capital in setting up their restaurant, which includes operating and real estate costs.
McDonald’s supplies the product and earns a percentage of sales. The company also charges a pre-determined amount for each franchise that wants its license.
This type is the exact opposite of the usual franchise and is used in over 6,950 restaurants in more than 80 countries.
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This structure is most effective in McDonald’s business model. The company can obtain a long-term lease or lease of the land on which the restaurant was built, while the franchisee pays the minimum rent for 20 years and continues to pay royalties to the company.
Exclusive recipients also pay for restaurant logos and interiors while receiving creative and operational assistance from their parent company. This structure ensures that McDonald’s revenue flows are stable and predictable while maintaining profitability while operating costs are low.
It is mostly used in China and Japan, where companies pay a percentage of proprietary sales for McDonald’s products. These include hamburgers, fries, condensed milk, beverages, salads, coffee and desserts.
Although small, McDonald’s has a number of restaurants that they own and operate, hiring staff and ordering their own supplies. However, the company’s goal is to have 5% of the restaurants owned by its company, while 95% will be owned and operated by the franchisee.
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McDonald’s most lucrative business model structure, a regular franchise, allows them to retain up to 82% of the revenue generated by their franchise, unlike company-run restaurants, which retain only 16%. Of their income. The success of their strategy in the international market gave rise to the term ‘McDonaldization’.
Over the years, McDonald’s has developed and refined its marketing strategy with the intention of maximizing profits for franchises and parent companies. Such strategies include enhancing the customer experience by focusing on people, products, prices, locations, and promotions that work together with its mission statement.
They are also working on their growth strategy, working on strategies to retain existing customers, gain lost customers and convert non-customers. Here is their 2017 growth plan and listed below:
In their efforts to implement it, they have improved their digital platform, such as delivery services, while enhancing the experience of the future (EOTF) by incorporating new technologies in restaurants. Of them.
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To further drive growth, they also worked on diversity with proposals of “diversity integration” and the acquisition of other companies, such as Donatos Pizza in 1968 and the Boston market in 2000.
McDonald’s strives to offer healthy options such as eliminating all preservatives, artificial colors and artificial ingredients from its seven burgers by adding Southern Grilled Chicken Salad to its menu. Slice an apple into a child’s apple pie. And recently, McPlant’s introduction. However, they still have not met with other restaurants that offer some quick options.
As stable as it seems, McDonald’s grip on the QSR industry may – due to changing needs and economic conditions – see some push and pull in the coming years. However, its income will not have much impact because people still need to eat. Also, due to their creative nature and strategy, they will eventually return in the long run. Their franchise business model will help in their recovery and / or growth.
Newsletter Want to get new business model analysis directly on your inbox? Subscribe now and do not miss the latest articles! Leave this field blank if you are human: TripAdvisor is an interesting business. It started as a user-generated travel review site and eventually developed into a contiguous area. It has seen tremendous growth in users and reviews and has taken its place. In the travel industry. In recent years, they have also become a meta-travel search engine as well as an online travel agency (OTA).
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It gives passengers a voice and a channel to exchange experiences. In doing so, it has become a major player in the $ 1.3 trillion tourism industry, which is highly divisive and has the largest player base in the hotel and airline industry, as well as travel agencies. Offline as well.
Most people do not understand the difference between Booking.com, Expedia or TripAdvisor. While they are all platform gathering needs, there are significant differences that you as an innovator should be aware of.
While TripAdvisor is significantly smaller in terms of market capitalization than the main Priceline of Expedia and Booking.com, it has more traffic and reviews:
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I am describing TripAdvisor business model in the 9 types of business model canvas you see below. Broadly speaking, the left side is the supply side from a business perspective and the right side is the customer / demand side.
TripAdvisor describes their price proposals to travelers as “helping them decide where to stay, how to fly, what to do and where to eat” and saving money by comparing “prices from 200+ booking sites”. And their price proposals for hotels, snacks, attractions and restaurants, such as listing “on top travel sites”, “reaching millions” and “sending your message at the right time”.
TripAdvisor presents their price proposals to travelers (= users) and travel providers (= partners) i.e. Hotels, restaurants, rental attractions [Source: TripAdvisor, Q1 ’17 results, pdf]
A platform business has two or more parties / customers that they need to value their customers. For TripAdvisor, these are travelers and travel providers: hotels, vacation rentals, attractions, restaurants. The user / passenger creates the demand side. Tour operators, hotels, etc. are the supply side.
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TripAdvisor also has an affiliate program where travel agencies made of brick and mortar (and online) have access to TripAdvisor inventory and equipment. This is the third part of their platform business model, and I am briefly explaining the following.
The main partners of TripAdvisor are the ones who launch their different business models. For their advertising business model, all hotels and OTAs that charge per click are very important. For their agency business model, hotels and OTAs pay for direct bookings. For their restaurant business, subscription partners and food distribution platforms are important. And of course, search engines in general are very important in feeding organic traffic.
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The main activity of TripAdvisor as a business on all platforms is to optimize the platform’s indirect network. Some key tips are: (1) adding valuable content and inventory, (2) enhancing the customer experience, and (3) increasing price proposals.
Network influence is at the heart of TripAdvisor’s business model [Source: Investor preso, Q4’14, pdf]. There is a direct network effect between content creators and other users, but there is also a powerful indirect network between users and hotels.
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The main function of the key resources and assets in the business model of the platform is to emphasize the indirect network influence, which is the core of this business model. For TripAdvisor, these are reviews (content) and their inventory (hotel stocks, attractions, restaurants are reviewed and booked). Other important resources (and assets) such as websites and mobile apps are there to provide a customer experience that is all about reducing friction.
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TripAdvisor divides both sides of the platform into hotels, restaurants, attractions, as well as travelers. Hotels, restaurants, attractions can
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