Business Model

This article compares the growth strategies of McDonald's and Starbucks, highlighting how financial context and operational costs influenced their expansion paths. McDonald's relied on franchising to overcome limited capital access in the 1950s, while Starbucks benefited from a mature financial market to grow through company-owned stores. Differences in store setup costs and investment requirements further shaped their approaches to global growth.

In the 1940s and 1950s, many fast food restaurants in the United States served meals that were high in fat and calories. By contrast, the McDonald brothers offered a simpler menu that emphasized ingredient quality, making their food relatively healthier for the time. They also used a unique method to prepare their French fries—soaking them in cold water to remove excess starch, which resulted in a crispier texture. Ray saw the opportunity to scale the McDonald brothers’ efficient service model beyond small-town operations and bring it to a nationwide audience across America.

McDonald’s was founded in the 1940s by the McDonald brothers, who aimed to provide simple, affordable, and tasty fast food. Starting as a single drive-in restaurant in California, they revolutionized the fast-food industry with their “Speedee Service System.”

A brand is an intangible asset that influences consumer choices through emotional connections and value propositions. A brand is built on long-term trust and perception. Destroying a brand is easy, but building one takes time and strategic effort. Changing the perception of an established brand is almost impossible.