Friday, December 30, 2016

Review of Instaread Summary, Analysis & Review of Ray Kroc’s "Grinding it Out: The Making of McDonald’s"

Review of
Instaread Summary, Analysis & Review of Ray Kroc’s Grinding it Out: The Making of McDonald’s

Five out of five stars
 In the modern world, we think of the visionary creators of new, disruptive companies as young people that never finish college. People such as Bill Gates, Steve Jobs, Michael Dell and Mark Zuckerberg created extremely valuable companies based on ideas they developed while very young. Older people are generally considered to be too set in their ways to have the vision to create a new industry.
 There are exceptions to this and one of the most prominent is Ray Kroc, the founder of McDonald’s. Kroc was in his early fifties when he encountered the original McDonald’s restaurant and understood how to create a franchise business that could go national and then international. The book being summarized is his personal account of how he built a global powerhouse, when he started out selling milkshake machines.
 As is stated in the summary, the key element of the genius of Kroc was to apply the assembly line techniques employed by Henry Ford to the making of hamburgers and fries. This is stated in key takeaway four.
“A 1972 ‘Harvard Business Review’ article contemporary with Kroc’s expansion efforts marveled at the way in which McDonald’s was able to take the assembly-line model of production and apply it to the food-service industry.”
Kroc’s genius has of course been copied by many other fast food franchises.
 Key takeaway five contains the most revelatory fact in the summary and further explains the success of McDonald’s. A system was developed where McDonald’s would acquire property and build restaurants to rent to franchisees.
“As of 2012, McDonald’s was the world’s largest developer of real estate and managed the greatest number of properties in the world.”
The revenue from the rent has allowed the McDonald’s company to avoid suffering during economic downturns. Harry Sonneborn was the first president and CEO of McDonald’s after leaving the Tastee-Freez ice cream chain. His quote in key takeaway five is a priceless explanation of how to effectively franchise.
“The only reason we sell 15 cent hamburgers is because they are the greatest provider of revenue from which our tenants can pay us rent.”
 While some of the disagreements between Kroc and others, such as Maurice and Richard McDonald, are mentioned in the summary, it is clear that Ray Kroc was a genius. Even though the book has the natural bias of being written by Kroc, this summary makes it clear that it is also a business story with lessons for the entrepreneur, whatever their age. 

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