CMG did benefit from McDonalds Corporations investment in the company after

Cmg did benefit from mcdonalds corporations

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CMG did benefit from McDonald’s Corporation’s investment in the company after opening the 16 th restaurant in 1998 (Hitt, Ireland & Hoskisson, 1999, p. 87). Through this investment, CMG grew to over 500 locations by 2005, thanks to the $360 million capital infusion provided by McDonald’s Corporation (Hitt, Ireland & Hoskisson, 1999, p. 87). However, after realizing their differences in culture and ingredients, the two decided to split ways (Hitt, Ireland & Hoskisson, 1999, p. 87). CMG restaurants are company-owned and either end-caps (at the end of a line of retail outlets), in-lines (in a line of retail outlets) or free-standing and typically range in size between 1,000 and 2,800 square feet and cost around $850,000 to open (depending on the market/location) (Hitt, Ireland & Hoskisson, 1999, p. 87). Understanding location and traffic
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barriers, “A Model” restaurants are opened in less densely populated areas and serve a limited menu to help keep costs at bay (Hitt, Ireland & Hoskisson, 1999, p. 87). Because CMG does operate with a higher food costs (organic and natural foods), the company has to make costs align somewhere else, which is why they choose to focus on operational efficiency, with the restaurant usually being smaller than their peers, utilizing an assembly line of workers, and presenting a limited menu (Hitt, Ireland & Hoskisson, 1999, p. 87). The company also utilized solar panels and rainwater harvesting at several locations and by 2012 had three restaurants that were LEED (Leadership and Environment Design) certified (Hitt, Ireland & Hoskisson, 1999, p. 88). When looking at fast casual restaurants, there are three drivers of success; consumer spending, consumer preferences, and commodity prices (Friedman & Roeder, 2012, p. 5). The economy plays a significant role in consumer spending; as unemployment increases, more and more decide not to dine at restaurants, including fast casual eateries, however, starting in 2012, growth rates and increases to revenues were expected to climb and continue to grow through 2016 (Friedman & Roeder, 2012, p. 5) which will help establish a future and profit for companies like CMG. CMG, like all companies, including fast casual eateries, are dependent on consumer preferences. As more and more become aware of unhealthy eating habits, and unhealthy eating at quick service restaurants (Friedman & Roeder, 2012, p. 6), CMG has the opportunity to gain more ground and increase business because of their commitment to freshness and healthful foods.
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In the same breath, consumer awareness about health issues surrounding restaurants is increasing (Friedman & Roeder, 2012, p. 6) and CMG’s recent battles with E.Coli will surely
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