Hi.
Good morning everybody.
How are you today?
Before I begin, as always, I'd just like to say that if you go to my site: stevenaskew.com,
you can find the script for this talk and some listening questions and sample answers,
as you can for all of my other talks.
And, if you want to keep listening, if you want to keep learning something in English,
then don't forget to subscribe.
OK.
Today, I want to talk to you about McDonald's.
Now, McDonald's is a little bit of a guilty pleasure of mine.
I do like McDonald's.
I know a lot of people don't.
A lot of people say you shouldn't eat McDonald's, but I do actually like McDonald's.
I don't eat it very often.
Possibly once every two months, but when I do go I tend to overindulge.
I might have a Big Mac set, a super-sized Big Mac set and some chicken nuggets and a
drink and a coffee.
Probably quite a lot, but, still, I don't have it very often.
It is a little bit of a pleasure of mine.
Now, I want to talk to you a little bit about McDonald's today, so we're going to start
with the background, of course.
You may or may not know that McDonald's was started by two people called McDonald.
They were brothers.
Richard and Maurice McDonald.
The McDonald brothers.
They opened up the very first McDonald's restaurant in San Bernardino, California.
Now, the first McDonald's was actually a McDonald's barbecue restaurant, and they generally sold
mostly barbecued stuff.
However, during the running of their restaurant, they realized that the hamburger that they
were selling was more popular than anything else.
They were making more of their profits from the hamburger, so they decided, of course,
to ditch the barbecue and to stick with the hamburger.
They introduced hamburgers, drinks and potato chips.
But, after a while, they turned those potato chips to French fries, of course.
Now, in the beginning, they sold hamburgers for about fifteen cents a hamburger.
Pretty cheap at the time.
Now, they were very popular and very famous because of a couple of things.
First was of course, the price of the hamburger and the second thing was the speed at which
they could deliver that hamburger.
And that speed came from something they called the speedee service system.
They didn't actually invent that system.
It was invented by a restaurant chain called White Castle, I believe, but they did improve
on it.
And that speedee service system meant that few people could make a burger much faster.
So, if you reduce the number of people it takes to make the burger, you can reduce the
cost of the burger, and you can sell fast burgers at a low cost.
Now, because they can serve these burgers quickly, because they can serve them fast,
fast food, they get more people coming through.
Your regular restaurant, you have people sit down.
You serve a burger, you cook the burgers individually, which takes a long time, you serve the burgers,
the people sit down, eat the burger and then they leave.
Maybe you charge more for the burger, but you don't get many customers going through.
The original McDonald's idea was you charge a very low price for the burger, you serve
it very quickly and you push customers out and you get a very high turnover.
And of course, if you're selling cheap things in bulk, in the end you make more profit.
Now, the McDonalds brothers had a few ideas about how to make customers move through their
restaurants very very quickly.
One thing they did was they didn't have any heating.
I mean, maybe it wasn't that cold in California, but still, in the winter that would move people
out.
Another thing they had angled seating.
The seats were actually angled ever so slightly forward.
That does two things: firstly, it makes them not very comfortable, but secondly, it makes
you hunch over your food, and if you're hunched over your food you're concentrating on your
food and you eat much more quickly.
Another thing they did is they had spread out seating.
They didn't encourage people to sit together and talk.
They made it very very unsociable in ... unsociable I suppose.
They wanted people to move, not sit and talk.
Another thing they did, they served their drinks in cone cups.
What does that do?
It means you can't put the drink down, you have to hold the drink in one hand, which
makes you eat much faster.
So, the brothers had these ways of making the fast food faster, of getting the customers
out, of creating a very high turnover.
And the very very first McDonald's mascot was based on this speedee service system.
He was called Speedee.
He was a hamburger with a chef's hat.
Of course, the mascot we know now, the Ronald McDonald the clown, wasn't introduced until
1965.
OK.
So, the brothers have this hamburger restaurant that becomes very popular and they start to
franchise.
They have five or six restaurants, I think, into about the early 1950s.
Now then, of course, a man called Ray Kroc comes onto the scene.
Ray Kroc was a milkshake machine salesman and he found out that the McDonalds brothers
were using six of his milkshake machines and he became curious.
So, he went along to see why, and he became so fascinated with the idea of the system,
the speedee service system, the overall philosophy of the hamburger fast food business that he
thought ... that he decided he wanted in on this action.
So, he managed to persuade the brothers to give him the rights for nationwide expansion,
and he agreed to give the brothers 0.5% of the gross profits.
The brothers themselves were not overly keen on expanding.
They were very keen to stay in this area, but he could see a market for this.
So, he got the rights for expansion and he starts to expand.
In fact, in 1958, there were 34 shops, 1959, there are 102 shops, Then, 1961, Ray Kroc
can see the future of McDonald's, so he buys the brothers out for $2.7 million.
Back then 1961, $2.7 million dollars was quite a lot of money.
Now, we talked about this with Starbucks a little bit.
In Starbucks, Howard Schultz, he bought out the three creators of Starbucks.
In this case, Ray Kroc buys out the creators of McDonald's.
And we always think looking back, if only they hadn't sold, they would be multi-billionaires
by now.
But of course, that's incorrect thinking I suppose.
Because without Howard Schultz in Starbucks, and without Ray Kroc in McDonald's, these
businesses may not have become what they became.
It was because of these people that they expanded to such an extent.
If Ray Kroc hadn't bought McDonald's, I probably wouldn't be standing here talking to you about
a chain called McDonald's.
So, that's a little bit interesting I thought.
So, Ray Kroc buys the business and he starts to expand.
Now, a couple of things that help McDonald's in their expansion here is marketing and flexibility.
Ray Kroc realizes very early on that advertising is a very important part of any business,
so he puts a lot of his profits into advertising.
And flexibility.
McDonald's is always researching, always doing market research, always trying to find out
what their customer wants.
Because, with any business, what is most important?
It's the customer of course.
And this can be seen with two examples.
Ray Kroc, he designed a Hawaiian style pineapple burger, and with all the tests they did, this
was a huge failure.
Nobody liked it.
So, they cancelled it.
Another idea, the fishburger.
Ray Kroc hated this idea.
He thought it would be insane.
But, they trialed it.
It was extremely successful.
They brought it in and now, in any country of the world, you can buy a
McDonald's filet of fish.
So, what they do is they come up with an idea.
They try it.
If it works they keep going.
If it doesn't work, they drop it.
And that has made them very very popular because they have streamlined their products to appeal
to the most people as possible.
Another thing they do is they also focus on the details.
Now, they want to make your customer experience good.
They want to provide you with a cheap burger, very very quickly.
So, a few examples of the way they think is ... for example, they've researched how many
patties you can put in a box before they get squashed down.
That means they can ship more and the more they can ship, the cheaper the shipping charges
become, the cheaper your burger becomes.
They've researched whether it's better to ship the burger completely cut or partly cut.
And they worked out completely cut, because if the burger is completely cut it saves a
few seconds in the grilling ... in the cooking process.
They've patented a machine that cooks the burger on both sides at the same time.
People that work in hamburger restaurants used to be called burger flippers, because
once the burger is cooked on one side, they flip it over, cook the other side.
But, McDonald's has a machine that you pull down and it cooks the burger on both sides
at the same time.
Obviously speeding up the process.
OK.
So, then there are a few more developments.
In 1968 the Big Mac is invented of course.
Expansion continues.
They move into Canada.
They move into other countries.
Canada in 1970ish, I think, and Japan in 1971.
So, in 1988 they have 10,000 shops.
1996 they have 20,000 shops.
They are expanding at the rate of five stores per day.
Of course, that kind of expansion rate cannot continue, but even so, today there are,
in 2017 there are 36,899 McDonald's all around the world.
In 120 countries around the world, serving, apparently, 68 million customers a day.
So, McDonald's these days is everywhere.
They have hit a few problems.
The recession.
A number of different things.
Health conscious people.
And the trend, the expansion, has slowed down recently.
They have had to close a few shops, but it probably won't last, and I'm sure they will
continue to expand.
OK.
So, that's basically the background.
Let's have a look at a few more interesting things.
Firstly, so why do we like McDonald's?
Everywhere you go you hear people complain about them.
"They're terrible, they're terrible, they're terrible, they're unhealthy, you shouldn't
use them."
And yet, people do.
68 million people every day do use McDonald's.
So, why do we like them?
Well, familiarity.
In any country of the world you go to, if you like the food, if you don't like the food,
McDonald's is always the same.
If you go to McDonald's in America, Italy or Japan, you will always find similar things
and they will taste pretty much the same.
They're convenient.
There are McDonald'ses everywhere.
They are addictive.
Salt, sugar, fat.
These are addictive substances like nicotine in tobacco, in smoking ... in cigarettes,
they release dopamine in our ... in our brains and they cause us to become chemically addicted
to these things.
Advertising.
McDonald's spends $2.5 five billion dollars advertising globally.
Which, actually, even though that's a lot, it is not quite as much as Coca-Cola who spend
about $3 billion dollars a year, but still they're advertising, so they're always in
our consciousness.
All right.
Now, here's the most important part of this talk I suppose.
Problems.
Problems associated with McDonald's.
Well, obviously, the first one is obesity.
In the developed world, in the Western developed world, we have an obesity epidemic.
If you look at America, if you look at the U.K., other European countries, if you look
at Australia, these countries are generally becoming obese.
I think about forty percent of Americans are now technically obese.
And people blame this on McDonald's.
People say McDonald's is making the country fat.
And I'm not sure about that.
I have two ways of thinking about this.
The first way of course, is if you are sufficiently educated, if you know what's in a McDonald's
burger, and you still go out and buy it and choose it.
If you still go out and choose it, buy it and eat it, then McDonald's is not to blame.
You are the one making that conscious choice, you are the one going out and buying that
burger.
If you become fat, if you have heart disease, it's entirely your own fault.
However, there is another way of thinking and I realized this listening to Jamie Oliver's
amazing TED talk.
I'll put a link to that somewhere down the bottom here.
And he made me aware that some people don't have that choice, either through education,
or lack of money.
A lot of schools don't teach about good cooking, they don't teach about nutrition, they don't
teach about food.
He shows a lot of children that don't even know what a vegetable is.
And if you are brought up in a family where your parents and parents have only ever eaten
McDonald's, you have no alternative.
If you cannot afford to eat healthily, if you don't have the education to ... to ... to
know how to eat healthily, then you have no choice.
And, in that case, yes, I think McDonald's is responsible.
They have a responsibility to educate these people and to make them aware
of what they're eating.
And, McDonald's has started to introduce some healthier options.
They have salads and things.
But, their salad dressings are incredibly unhealthy.
But, still, they're not doing enough to educate people, I think.
Ok.
That's obesity.
Globalization.
We talked about this with Starbucks.
Starbucks and McDonald's are the faces of globalization.
Some people say McDonaldization.
That's a nice word.
McDonald's is everywhere.
It's always the same.
They do have regional varieties.
In Japan, in India you can get ... in India you can get vegetarian burgers.
In Japan you can get rice burgers.
There are different variations, but generally McDonald's is the same wherever you go.
In fact, they're so much the same that The Economist magazine uses the Big Mac to work
out price disparity between countries.
They have the Big Mac index.
What that does is it looks at the price of Big Macs in a range of different countries
and from that you can work out the cost of living.
Right now, at the moment, the most expensive Big Mac in the world is in Switzerland, which
is $6.81, and the cheapest Big Mac in the world is in India, $1.62.
So, by knowing those prices you can generally know the standard of living in those countries.
So, globalization.
Children.
McDonald's is very conscious that if you can make children eat McDonald's, if you can addict
children to McDonald's from a very early age, they will be customers for life.
And, generally that is true.
And they do that in a number of ways.
Obviously, the Happy Meals, they have toys.
Children go there for the toys.
They have ... their mascot is a clown.
The mascot is a bright, colorful, cheerful, happy clown.
The colors; bright, beautiful colors.
They have play areas for children.
They have family seating areas.
They have movie tie ins.
Any time there's a children's movie released by Disney or Pixar, any of those companies,
McDonald's releases toys and products that go along with that.
So, they are working very hard to get children into their restaurants because once you're
a customer you're always a customer.
And the last problem I suppose, is the environmental problem.
The environmental factors involved in McDonald's.
McDonald's, they are trying to recycle.
After the ozone layer problem was discovered they got rid of their polystyrene boxes.
They stopped using C.F.C.s, and they've moved to paper and plastics, but they're trying
to recycle.
They do use a lot of recycled paper every year.
However, it's nowhere near enough.
And, of course, there are the other environmental factors.
Have you ever thought about how that hamburger comes to you?
How that beef is raised?
Well, your average cow, to make one hamburger, you need 2500 liters of water.
You need 8m2 of rainforest to make just one hamburger.
In fact, 91% of the rainforest destruction in the Amazon is because of, well, hamburgers.
Not just McDonald's, but because of the beef industry.
The forest is cleared to make grazing land because you can make more money grazing cattle
than you can any other way from the land.
So, they cut down the trees, they sell the timber, then they put cows on the land.
91% of the deforestation in the Amazon is because of beef.
15% of the emissions that are causing global warming come from livestock, come from cows.
The methane, the CO2, all of that.
The food.
Every year ... not every year, sorry ... every day in the world, all the people on the world
eat approximately 661 million tons of food.
OK?
All of the livestock in the world eat approximately 4.2 billion tons of food.
If we were to get rid of half of the cows in the world, half of the livestock in the
world, we could feed everybody in the world to an excellent standard.
If 50% of people in the world became vegetarian, we could feed the world.
We certainly could.
Anyway, there's a few problems for you to think about.
Another problem which isn't really because of McDonald's, it's because of the way of
the world the moment is a ... McDonald's is slowly moving towards automation.
Right now, you can go in to McDonald's and you have an automated ordering screen, touch
screen, and you can order ... you can, in fact you can design your own burger.
You order it, and then you go and pick it up from another window.
What does that do?
It eliminates the person at the desk.
So, McDonald's, along with many other industries, are trying to reduce the number of workers
they have.
What does that do?
Well, of course that reduces the price of your burger.
But, of course, it puts people out of work.
But, that's going to happen in the future.
That's happening everywhere.
That's not something we can avoid and that's something I would like to talk about
in another talk.
Someone once said that teachers, we are teaching students for a future where 80% of the jobs
they will do haven't yet been invented.
And how do we possibly plan for that?
No idea.
That would be an interesting talk one day.
Anyway, so that was McDonald's.
I hope you enjoyed it.
As always, don't forget, if you did like this video then press the like button down here,
share it to your friends, other people that want to learn something in English.
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Thank you.
And if you have any thing you'd like me to talk about, anything you'd like me to research,
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talk about it.
Anyway, thanks for listening.
This was fun.
Talk to you next time.
Bye.
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