Chapter 14, Summary and Analysis

McDonald's not only changes the food service industry, but the food processing industry as well, building its own wing of the food processing trade. McDonald's has a $1 billion-a-year company that manufactures more hamburgers than anyone in the world. McDonald's deliberately avoids drawing attention to this fact in part to avoid attacks from other food suppliers, which it avoids using due to its unique way of making products. Other factors are important as well.

McDonald's food suppliers grow with it and the author describes some cases. McDonald's is particularly adept at using loyalty to generate greater efficiency. It also avoids written contracts for this reason. This helps to promote an atmosphere of cooperative innovation as well. The author illustrates this with the potato manufacturer Simplot. Similar issues arise in the meat business, although some trouble arises when McDonald's insists on avoiding frozen...