Very Golden Arches

By Kerry A. Dolan

Forbes, 1st January 1996

On the opening day of McDonald's first restaurant in Kuwait in June, 1994, the drive-through line was 7 miles long.

That's the kind of stir $25.9 billion (systemwide sales) McDonald's is used to creating. Now operating 17,400 restaurants in 89 countries, McDonald's continues to be one of the great success stories in American business. Of the top three restaurant chains on our list, the Oak Brook, Ill.-based firm had the best profit margin (14.5%), best growth in sales (18.7%) and best earnings growth (17%) in the past 12 months.

Increasingly, these impressive numbers are being generated abroad. Last year more than half the company's operating earnings came from overseas outlets--buoyed by strong foreign currencies and the mass appeal of the brand name. Sales growth outside the U.S. rose 30% in the first nine months of 1995, four times the rate of gain at home.

"Our vision is to dominate the global food service industry," says Chairman Mike Quinlan, 51, who joined McDonald's 33 years ago in the mailroom.

By year's end McDonald's will have added 1,300 new restaurants outside the U.S., 40% of them in Japan, Canada, Germany, England, Australia and France, what McDonald's calls its "Big Six" international markets.

Once on the ground, McDonald's adapts its menus to local taste - kosher beef in Israel, halal beef in Malaysia, vegetarian burgers in India. "Think globally, act locally" says Jack Greenberg, vice chairman of McDonald's.

At home, McDonald's isn't sitting still. In 1995 it added 1,100 new outlets in the U.S., including 550 "satellite" restaurants--some in gas stations, others in Wal-Mart stores.

With new marketing tie-ins, such as the 1996 Olympics, 1996 looks like more of the same: up at home, up even more abroad.

See also :
  • Golden Arches Galore - McDonald's 1996, not so golden for U.S. Corp.

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