31/1/10

1. A multinational corporation (MNC) is a corporation or enterprise that manages production or delivers services in more than one country.

2. A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself, rather its only purpose is owning shares of other companies. Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies

3. The similarities and differences between a multinational corporation and a holding are as follows:
- Holding companies do not produce goods or services itself unlike a MNC
- Both a Holding company and MNC can control/own a multitude of smaller companies beneath itself
- MNCs are involved with more than the owning of shares.

4. McDonalds
i) The company began in 1940, with a restaurant opened by the two brothers Dick and Mac McDonald in San Bernardino, California. Their introduction of the "Speedee Service System" in 1948 established the principles of the modern fast-food restaurant.

However the McDonalds Corporation first began when, Ray Kroc franchised the business from the McDonalds in 1955. Establishing in Illinois the first franchised restaurant and, the entire corporation’s headquarters.

The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped head whose name was "Speedee." Speedee was eventually replaced with Ronald McDonald by 1967 when the company first filed a U.S. trademark on a clown shaped man having a puffed out costume legs.

McDonald's first filed for a U.S. trademark on the name McDonald's on May 4, 1961, with the description "Drive-In Restaurant Services", which continues to be renewed through the end of December 2009.

ii) McDonalds primarily sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, milkshakes, and desserts.

iii)The McDonalds Corporation has diversified themselves recently, in response to obesity trends in Western nations and in the face of criticism over the healthiness of its products; the company has modified its menu to include healthier alternatives i.e. salads, wraps and fruit.

In addition to its signature restaurant chain, McDonald’s Corporation held a minority interest in Pret A Manger until 2008, and owned the Chipotle Mexican Grill until 2006 and the restaurant chain Boston Market until 2007.

iv) The advantages this diversification process has provided allows the McDonalds Corp to capitalize on the growing consumer interest in health and wellness. This can be further seen with McDonalds’s revenue. McDonalds’s revenues grew 27% over three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion.

v) New York Stock Exchange (NYSE:MCD)

vi) There are, 13 different members currently seated on the Board of directors.

5. Berkshire Hathaway

i)Berkshire Hathaway manages their subsidiaries and oversees the transactions and development of their assets. They could be considered an asset stripper as; through the transactions of smaller companies they have themselves experienced a tremendous growth in revenue and net worth.

ii) Berkshire achieved growth from switching its business strategy. As opposed to merely obtaining stocks and shares, they have now focused on buying entire companies. Berkshire because of this strategy now owns the majority interest in GEICO insurance in addition to, a diverse range of businesses including candy production, retail, home furnishings, encyclopedias, vacuum cleaners, jewelry sales; newspaper publishing; manufacture and distribution of uniforms; manufacture, import and distribution of footwear; as well as several regional electric and gas utilities.

6. McDonalds actually has not experienced any trouble operating in the international/overseas market. In fact, they have found more international success than in the domestic market.

7. The problem that could rise from their international dependency could be there overreliance on the international/global economy. This can be exhibited via the global recession that has recently occurred could put financial restraints on the company i.e. forcing global franchises to cut costs or laying off employees.

8. Conglomerate- a corporation consisting of a number of subsidiary companies or divisions in a variety of unrelated industries, usually as a result of merger or acquisition

9. Coca Cola, McDonalds, IBM, Google, Microsoft, Sony, General Electric, and General Motors.

10. Conglomerates advantages are as follows:

1. By participating in a number of unrelated businesses, the parent corporation is able to reduce costs by using fewer resources.

2. By diversifying business interests, the risks inherent in operating in a single market are mitigated. However, history has shown that conglomerates can become so diversified and complicated that they are too difficult to manage efficiently. Many conglomerates have reduced the number of businesses under their management to a few choice subsidiaries. They are also highly dependent on the turnovers of their subsidiaries as exhibited by Sony’s loss of $3 billion.