Here are some reasons why a business might choose growth maximization over profit maximization as a corporate objective: - Growth allows a company to achieve economies of scale which can help lower costs per unit and increase profitability over the long run. Focusing only on current profits may limit future potential. - Rapid growth can help a company gain a competitive advantage and larger market share before competitors enter the market. This makes it harder for others to challenge the company. - Investing profits back into the business to fund growth shows shareholders the company is prioritizing expanding the overall value of the business rather than just short-term profits. This maintains investor confidence. - In some industries like technology, a growth-focused strategy may

2. entrepreneur
ship
and
franchising

3. presenters
Syed Wasiq Hassan
Ghufran Waseem
Salman Zia
Summaya Mehar Iqbal
Madiha Shahid
Saad Ullah Khan
Arsalan Ullah Qureshi

4. 1940 McDonald brothers open the first McDonald’s
and names Speedee as their company image
Ray Kroc, a multimixer
1954 salesman becomes the
franchising agent
Ray Kroc buys out the McDonalds
brothers for $2.7 million
19’61
creation of ‘McDonald’s Center of
Training Excellence’
“Hamburger University”

5. McDonalds goes public
first TV Ad airs
1965
Big Mac invented
opens in Canada and Puerto Rico 1967
‘71 ‘79
Egg Happy
McMuffin Meals
invented introduced

6. more than34,000 1.8 million
restaurants worldwide employees
119 81%
countries of restaurants are franchised
69 million
people served daily
global overview of McDonalds

7. Revenues by company operated restaurants
$18.29 billion (2011)
Franchised sales
$67.65 billion (2011)
Margin of company operated restaurants = $0.83 billion
Margin of franchised restaurants = $1.9 billion
2012 2007
Company operated restaurants 6,598 6,906
Franchised restaurants 27,882 24,471
% of franchised Restaurants 81% 78%

9. McDonalds
presence in Pakistan

15. Pakistani Parallel
UFONE – Tum He To Ho!!!
Subsidiary Brand
PTCL PTML UFONE
started it’s operation in January 2001
Ufone became the part of Etisalat in 2006
second largest cellular company in
Pakistan
franchises = 359
service centers = 17
one stop shops = 09

16. Pakistani parallel (contd.)
• Both McDonald's and Ufone are the example of Brand
franchising
• Both mainly depend upon there franchising instead
of company owned outlets.
• Both serve the customer directly. B to C
• Mainly franchises exist in the developed areas and
both have opportunity in rural part
• Both companies have used extensive marketing as
there main tool for growth maximization

17. Q1
What do you understand by the
term economies of scale?
How will economies of scale affect
McDonald’s?

18. economics anyone?

19. Long run
average cost
economies
of
scale
the advantages that
result from being large
which lead to reductions
in average costs

20. uniform menu offerings can be
mass produced, lowering
production costs;
the company's bargaining power
with its suppliers lowers its input
costs and boosts margins;
the company's large advertising
budget gives McDonald's a
significant competitive advantage
over its competitors.

21. uniform menu offerings can be
mass produced, lowering
production costs;
the company's bargaining power
with its suppliers lowers its input
costs and boosts margins;
the company's large advertising
budget gives McDonald's a
significant competitive advantage
over its competitors.

22. uniform menu offerings can be
mass produced, lowering
production costs;
the company's bargaining power
with its suppliers lowers its input
costs and boosts margins;
the company's large advertising
budget gives McDonald's a
significant competitive advantage
over its competitors

23. how will economies
of scale affect
McDonalds? (contd.)
franchisor perspective
the more restaurants are there, the
lower the cost of production and
hence the more profit margins will
be there.
franchisee perspective
due to division of labor efficiency
will improve
same operations for the large
volume will lower the per unit cost
of output

24. Q2
You have been hired as advisor on the
Pakistani market by McDonald’s. Based
on your observations of the Pakistani market,
prepare three instructions you
would issue to the franchisee on behalf of
McDonalds, and explain why you think they are
important.

25. Lets eat out! Look for the Golden Arches! The closest thing to
home McDonald's is your kind of place You deserve a break today
Enjoy the best food at McDonald's We do it all for you You,
McDonald's mission is to be
you're ourone Nobody can do it like McDonald's can You deserve
the customers' favourite
a break today Nobody makes–great taste of McDonald‘s It's Mac
place and way to eat with
Tonight McDonald's is your place to be Good time, great taste
inspired people who delight
There's nothing quite like a McDonald‘s You Deserve A Break
each customer with
unmatched
Today Food, folks and fun McDonald's Today What you want
is quality, service, cleanliness magic? Have you had your
what you get Do you believe in
and value every time
break today? My McDonald‘s Did somebody say McDonald's?
We love to see you smile Put A Smile On Smile I'm lovin' it
It's what I eat and what I do It's what I eat and what I
do...I'm lovin' it What we're made of your day like McDonald's
can We cook it all for you at McDonald's McDonald's and you

26. Lets eat out! Look for the Golden Arches! The closest thing to
home McDonald's is your kind of place You deserve a break today
Enjoy the best food at McDonald's We do it all for you You,
you're the one Nobody can do it like McDonald's can You deserve
a+ local elements in productstaste of McDonald‘s It's Mac
break today Nobody makes great
Tonight McDonald's is your place to be Good time, great taste
+ training
There's nothing quite like a McDonald‘s You Deserve A Break
Today Food, folks and fun McDonald's Today What you want
+ quality checks
is what you get Do you believe in magic? Have you had your
break today? My McDonald‘s Did somebody say McDonald's?
We love to see you smile Put A Smile On Smile I'm lovin' it
It's what I eat and what I do It's what I eat and what I
do...I'm lovin' it What we're made of your day like McDonald's
can We cook it all for you at McDonald's McDonald's and you

27. Q3
Why do you think that over 70 per
cent of new businesses fail but
90 per cent of franchises succeed?

28. ARE YOU WATCHING CLOSELY?

29. franchising
success failure
success
new businesses

30. new businesses fail…
 start from scratch
 incomplete market research
 high investment at stake
 high managerial skills
 high risk involved

31. Q4
Discuss the advantages and
disadvantages of being a
franchisee.

32.  being there own boss
 selling the brand
 intensive initial training
+
 continuous support
 marketing by franchisor itself
 managerial talent
 get a head start
 shared liability

33.  legal regulations
 investment
 profit sharing
 you must play by the rules
 nothing is ever free
 not independent
 limited duration for agreement
-

34. Q5
Evaluate why a business might choose
a corporate objective of growth
maximization over profit maximization?