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Shopping Mall and Theater Concession Sales Essay

1. Scale Economies and Diseconomies at McDonalds: How does having a menu that is uniform around the country provide McDonald’s with economies of scale? How is menu planning made more complex by expanding into other countries?

McDonalds menu is economy to scale because when they order their product, they can order in bulk to lesion the cost. Also when you have a uniform menu, no matter what state you go to you know what to expect; which in return could increase sales. In places like India, where they do not eat cow, ordering a McDouble is simply not going to happen. The cow is their “God” and to put a food chain that specializes in serving their “God” between two buns will be hurtful to their image and customer base in that company. If they wanted to expand into the other countries, they have to make sure they do not offend the customer base in that country.

2. Scale Economies and Diseconomies at the Movies: Movie theater concession sales account for well over half the profits at most theaters. Given this, what are the benefits of the staggered movie times allowed by multiple screens? What is the benefit to a multiscreen theater of locating at a shopping mall?

Staggering movie times would mean less wait in the concession, people don’t like to wait and if you have 4 movies showing at the same time with 60 people at each showing, and if 25% of the people want concession foods, that could be 80 people waiting in line for a movie that starts in 10 min. It is less hassle for the movie theaters to stagger times for their concessions rather than all at the same time. A Mulitscreen theater showing helps the mall revenue. The malls always have a food court which while you are waiting or go window shopping could lead into people buying goods from the mall when they only wanted to go to the movies.

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