McDonald’s Company Acquisitions and Mergers Term Paper

Introduction

One of the paramount pointers of the achievement or fiasco of a company is their capability to acquire/merge or to be acquired/merged. Businesses that can acquire or merge with other corporations have an opportunity to develop their capacity to furnace enterprises with other business frontrunners. They frequently enlarge their facilities internationally to obtain more incomes and spread their trademark.

Companies, such as McDonald’s Corporation, have an opportunity to profit from attainments in methods that such companies as Sonic Corporation, could not. After evaluating the approaches that were exploited by McDonald’s Corporation to obtain Boston Market, its influence on the company, and its worldwide business-level and corporate-level stratagems, one is presented with an opportunity for better comprehension of the schemes that Sonic Corporation could advance to upsurge their incomes by the means acquisitions and mergers, along with business-level and corporate-level strategies they can advance to spread their facilities worldwide (Sonic Corporation, 2012).

The Strategy that Led to the Merger or Acquisition

Originated in San Bernandino almost 60 years ago, McDonald’s Corporation has progressed from a minor burger shop making to an eating place domain with system-extensive trades that has reached forty billion dollars (Funding Universe, 2012). The company had encountered a rapid extension in their trades during the last twenty years and conducted other attainments to upsurge their reserve and produce larger incomes for the company.

McDonald’s wanted to endure its accomplishments by exploiting upon this strategy with the attainment of Boston Market Corporation fifteen years ago, which was slowly recovering from the lack of sales (Funding Universe, 2012). McDonald’s used a chance to apply their capitals and escalate their incomes along with the triumph of the newly introduced Boston Market trademark.

At the moment of attainment, Boston Market still recollected more than eight hundred openings and the company produced an income of six hundred million dollars, demonstrating to be an astute gaining for McDonald’s on that stage. “Though McDonald’s experienced success with Boston Market Corporation as an acquisition, McDonald’s was unable to make the profits that they anticipated” (Funding Universe, 2012, para. 3).

McDonald’s Made for You scheme that delivered personalized snacks to the consumers amplified the excellence of foodstuff that was provided; however, it augmented the amenity interval and became work concentrated as well. This occasion was of assistance to drop trades, and McDonald’s received even more complications when “it was discovered that the corporation was adding beef extract to the vegetable oil used to cook the fries, despite the fact that it had been advertised that McDonald’s used 100% vegetable oil” (Funding Universe, 2012, para. 4).

With lawsuit growing from the fraud, McDonald’s mislaid more commerce as they turn out to be attached as an unnatural eatery, which triggered them to rearrange their list of options in order to reveal a more health-aware customer populace. McDonald’s was enforced to reduce Chipotle Mexican Grille and Donatos Pizzeria in an exertion to center their struggles on fortifying the worldwide achievements of the eatery (Funding Universe, 2012).

It was after the transaction of Boston Market Corporation and McDonald’s other attainments that the company could recover incomes to recollect their place as the major food service marketing chain worldwide by the means of a invigorated emphasis on improving their trademark, rather than escalating their facilities (Cartwright & Cooper, 2012).

Despite the fact that it looked like an intelligent choice for McDonald’s to obtain Boston Market Corporation, the conclusion showed to be less beneficial to its accomplishment, as the company encountered too many matters to retain to the realization that could have been acquired from the attainment. For a corporation as huge as McDonald’s, the major encounter for the company should have been the changeover extent of time, while the workers amend to fresh management and rules (Vaara, Sarala, Stahl, & Bjorkman, 2012).

The subjects that ensued after McDonald’s have assimilated Boston Market Corporation failed to provide the company with the chance to prosper, and showed to be a depraved scheme. Remembering the difficulties that McDonald’s experienced after obtaining companies for enlarged income, one can better comprehend the policies that could be implemented by Sonic Corporation, who at this time functions exclusively on the territory of America and have not learned other corporations.

A Profitable Candidate for the Corporation

“Sonic Corporation, which originated as a root beer stand called Top Hat restaurant, was founded in 1953 by Troy Smith” (Sonic Corporation, 2012, para. 1). Since its foundation, the company has collected almost two hundred and sixty million dollars in trades and is recognized as the fifth biggest burger conglomerate (Sonic Corporation, 2012). The corporation had the opportunity to appreciate several years of triumph because they have concentrated their exertions on decreasing income amounts through generating settings where employees feel appreciated.

For instance, Sonic Corporation permits administrators in their numerous settings to become marginal associates rather than squad frontrunners for their numerous settings, which consents administrators to generate a timetable that is best suitable for them and, as a result, give a better performance. Latest years have carried difficulties, which have triggered the company to advance the Repurchasing Program that would consent stockholders to trade shares in the company (Sonic Corporation, 2012).

Despite the fact that the company has obtained excessive accomplishment with almost twenty-two hundred eateries in twenty-seven states, there is an unlimited chance for the corporation to produce more incomes by the means of the acquisition of a corporation that equals their objectives to offer superior drive-in provision with an exclusive attitude for their devoted consumers.

After perceiving the difficulties that McDonald’s suffered from obtaining several restaurant chains, it would be beneficial for Sonic Corporation to combine with Ruby Tuesday, who proposes the similar excellence of package to consumers in the formula of home-made food. Ruby Tuesday presently possesses 850 localities not only in the United States but worldwide and has the ability to produce a little more than a billion dollars.

This fact could assist as an improvement for Sonic Corporation, who has not extended their facilities worldwide. The union would consent Sonic Corporation to obtain important associates that could enable their development and promise that the corporation would upsurge their income over the following few years (Faulkner, Teerikangas, & Joseph, 2012).

Business-Level and Corporate-Level Strategy for McDonald’s

McDonald’s can uphold attainment in the worldwide marketplaces exploiting both business-level and corporate-level approaches that center on supplying their foodstuffs and facilities to the principles of the consumers. One of the key business-level approaches that McDonald’s Corporation exploits is the diversity of their production in dissimilar countries to guarantee that the demands of the consumers are encountered despite the alteration in principles.

For instance, the McDonald’s in Germany serves McRib burgers during all year, while it is sold as a seasonal thing in the United States (Funding Universe, 2012). “McDonald’s in India does not serve beef, which made it important for McDonald’s Corporation to apologize to the Hindu population when it was discovered that the corporation added beef extract to the vegetable oil that cooked the fries. Contrary to the traditional apple pie that are served in the United States, the McDonald’s in Brazil offers banana pies for their dessert” (James, 2009, para. 3).

One of the corporate-level approaches that McDonald’s implements to gather global triumph is the intensification of the excellence of production that is sold in other countries. One technique that they have engaged to guarantee that this issue is approached is to acquire stock from ‘Pret A Manger’, a corporation located in England that is devoted to selling organic food to their clients. While this emphasis triggered McDonald’s Company to sell the businesses assimilated outside the burger commerce, it has augmented their productivity globally and permitted them to raise the excellence of their foodstuff in these extents.

Business-Level and Corporate-Level Strategy for Sonic Corporation

Remarking the attainment that McDonald’s Company has preserved over the years with worldwide commerce, there are business-level and corporate-level approaches that Sonic Corporation could apply to assure their accomplishments upon intensifying their trade (Sonic Corporation, 2012). Sonic Corporation had an opportunity to benefit from generating an exclusive atmosphere for consumers by the means of proposing drive-ins with attendants and servers on roller skates and selling decent quality snacks. This exclusivity will permit them to prosper transnationally.

One business-level approach that can be implemented by Sonic Corporation is price management, which involves generating costs that are little sufficiently for consumers to appreciate. Sonic Corporation has previously engaged this method in America by proposing Happy Hour, during which consumers can buy beverages twice cheaper on a particular hour of the day. This approach would seizure the devotion of many worldwide clienteles, who are familiar with buying beverages at comparatively high costs.

One corporate-level approach that Sonic Corporation can implement while intensifying their facilities worldwide is their strategy of upholding low reversal degrees. Sonic Corporation views a lot of their executives in their eatery places as sectional associates, which permits the employees to advance more bendable timetables and consequently enables an enhanced efficiency from the executives and their workers.

If this strategy is implemented transnationally, the corporation has a chance to upsurge their incomes because the persons who are handling the eatery locations in the numerous countries will sense they are conferred in the triumph or fiasco of the corporation. The frontrunners are more expected to receive guidance from the employees who will be able to offer techniques towards modernization of the facility of the eatery, and clienteles will be given service that is exclusive to the country or the scene where they live.

Conclusion

In summary, acquisitions and mergers usually assist companies in increasing their incomes and business prospects in other sites around the globe. Despite the fact that the experience of McDonald’s Company was exclusive, there are a lot of instances that can be observed when the situation requires a successful acquiring and merging of two companies composed. When the appropriate business-level and corporate-level approaches are implemented, companies can effectively upsurge their accomplishments and openings for development.

“Through the evaluation of the strategies used to acquire Boston Market Corporation as well as the impact that McDonald’s Corporation’s acquisition of Boston Market Corporation had in their profits and success” (James, 2009, para. 5), one can better comprehend how Sonic Corporation might acquire new knowledge from this practice to obtain and combine with Ruby Tuesday, Inc. and enlarge their facilities worldwide.

References

Cartwright, S., & Cooper, C. (2012). Managing mergers acquisitions and strategic alliances. London, United Kingdom: Routledge.

Faulkner, D., Teerikangas, S., & Joseph, R. (2012). The handbook of mergers and acquisitions. Oxford, England: Oxford University Press.

Funding Universe. (2012). McDonald’s Corporation history. Web.

James, R. (2009). McDonald’s abroad. Web.

Sonic Corporation. (2012). Sonic announces new $40 million share repurchase program. Web.

Vaara, E., Sarala, R., Stahl, G., & Bjorkman, I. (2012). The impact of organizational and national cultural differences on social conflict and knowledge transfer in international acquisitions. Journal of Management Studies, 49(1), 1-27.