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Business Level 3 Unit 39 - Assignment 1 P1 All criteria met for P1, gained a pass fist time for this piece of work.
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P1What is an international business?
An international business is a business that exchanges good with other businesses as well as
individuals in other countries; the goods that are exchanged include services and products as well as
transportation and investments.
McDonald’s
McDonald’s is a fast food restaurant franchise that is known globally and serves food to many
customers around the world. McDonald’s are a franchise; they are located in many different places.
They sell a variety of goods to customers; these include burgers, chicken products, soft drinks,
milkshakes/frappés and types of deserts as well as breakfast items.
McDonald’s was founded as a joint business partnership between McDonald’s Corporation and two
business; one of the business men were American and the other British. The first McDonald’s
restaurant in the UK was opened in 1974; they now currently operate 1,200 restaurants across
Britain and they also serve worldwide and have 36,525 locations; they have 420,000 employees
overall.
McDonald’s have different types of restaurants that sell the same products, these are known as a
standard restaurant which usually has a drive through service which also allows their customers to
dine within the restaurant. Another type of McDonald’s restaurant is known as a ‘McDrive’ which is
where they sell the products through a drive through window but do not offer seating within the
restaurant or counter service; this restaurant is usually based along main roads and in service
stations along the motorway, they are also linked to petrol stations as part of the convenience store.
The final type of restaurant is known as a ‘McCafé’ restaurant, this is a café designed restaurant
which is based in shopping centres and on small high streets; they don’t offer a drive through service
but they do offer seating and over counter service. Although these restaurants are slightly different
to each other, they still share the same aims and objectives; these are to be the best of the best and
to provide food of a high standard to customers.
The competitors that McDonald’s have are KFC, Burger King and Subway; this is because they all
offer fast food to customers which may potentially take their customers; in order for McDonald’s to
stay at the top of the market they offer products at a slightly lower rate; for example the saver menu
which offers products for £1 to customers. As well as this, McDonald’s also offer customers a
discount if they have and retain the bus ticket with the McDonald’s meal deal on it; this allows the
customers to purchase a meal for £1.99 where it would normally cost them around £4+.
Economies of Scale
Economies of scale is the cost that is increased from the output of the product produced. Due to the
relationship between the quantity of products produced and the fixed costs that are involved within
the production, the higher amount of goods produced will enable lower fixed costs.
The benefits of economies of scale to India is that they are able to purchase a greater amount of
goods because of the lower fixed costs which will cost less overall.
There are two main types of economies of scale, these are internal and external.
Internal economies of scale is the factors that arise from within the company, these consist of
production costs; these also include the costs of materials etc. An example of how economies of
scale can arise within businesses are investments into high quality and expensive machinery; this can
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