Objectives of the business
McDonalds is a company, which provides a service for the public. It is a well-known and popular restaurant that has been around since 1974. Today there is all over 1,184 McDonalds restaurants operating in the UK and are very successful. The basic history of McDonalds: In 1974, McDonald’s opened its first restaurant in the UK. Today, more than 2. 5 million people in this country place their trust in McDonald’s every day – trusting the Company to provide them with food of a high standard, quick service and value for money.
McDonald’s has always been a franchising Company and has relied on its franchisees to play a major role in its success. McDonald’s remains committed to franchising as a predominant way of doing business. McDonald’s main objective is to make a profit. Approximately 70% of McDonald’s worldwide restaurant businesses are owned and operated by independent businessmen and women, their franchisees. When the earliest McDonald’s restaurants were opened in the UK in the 1970s, customers travelled miles to visit them.
Today, customers demand greater convenience and want to visit a McDonald’s wherever they are, and at any time during the day. Customer convenience and research is the driving force behind new restaurant locations
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Is an important objective for companies, which are owned by shareholders. Profit revenues exceed cost, so profit occurs when the maximum difference between sakes revenue and total cost is greatest. Public Limited companies such as Tesco, Lloyds TSB, and ICI seek to motivate provides high returns for their shareholders high profit levels offer companies real advantages. They provide funds to invest in improving products and production and they can use profits to launch new products.
The main objective of McDonalds is almost certainly to make a profit. The reason McDonalds seek to make a profit is that, without profit, it is unable to do all the things it wants to do. Without profit McDonalds cannot keep its shareholders happy, it cannot pay higher wages to its employees, it cannot invest in better technology to improve its products and so on. One of the most important objectives of McDonalds is to make a profit.
If McDonalds does not make a profit will find it difficult to plough back money into research and development, it will find it difficult to invest in new technologies, it will not have money available to give to charities and to carry out ‘good works’ and it will not be able to increase the rewards to its employees. Of course, if you make a loss it is possible to borrow, however, lenders will look very carefully at your profit potential before parting with their funds. It is a basic fact of business life, therefore, profit is important to McDonalds.
Due to the fact that McDonalds are a Public Limited Company. They are owned by their shareholders. Of course, these shareholders want McDonalds to do well, but they also want to receive a return on their shares in the form of dividends (money paid at regular intervals to shareholders as a reward for the sacrifice they are making in buying shares). If McDonalds continue to make a loss, the shareholders will lose confidence and many would sell their shares. While profit will continue to be the driving objective behind many businesses, for most it is likely to be an elusive objective in the medium to long term.