McDonalds Case Study

CASE BACKGROUND

• Burger king, Wendy’s, Hardees and Jack in the box fast food restaurants gets other profits and results to divide the profits earned as well as the customers.

• 1937 McDonald is a company known for selling barbecue, beef and hamburgers, and is wildly successful.

• 1965 Under the leadership of Kroc and Sonneborn, McDonald's became a public company.

• 1984 Two important event occurred in McDonalds : 1st 50 Billionth hamburger, earning over 10 billion in sales opening somewhere in the world, every 17hrs and continue its international expansion, opened new restaurant in Moscow.

• 1953-1954 Dick and Maurice hired a franchise agent, William Tansey when they realized they were missing a significant opportunity.

-The store purchased 10 multimixers and Kroc became their franchise agent in U.S

-Speed of Service, quality of food, cleanliness (QSVC)

CASE PROPER

Time context

In 1948 Dick and Maurice decided to close their business for three months because they were growing tired of running their operation in the face of increased competition, a labor shortage, and increasingly complex situations, they decided to overhaul their operations by introducing a revolutionary new business model based on their new “speedy service system”

1992 McDonald discontinued its quality, service, value, cleanliness, because of increased tension between McDonalds and franchisees.

1999 “Made for you” cooking system designed to allow customers to order and receive their food in 90 sec. to combat rivals, product innovation as well as their 40 new menu items did not produce the desired results and lead to farther tension

2003 Mcdonalds “Plan to win” focused on five key drivers of success: people, product, place, price and promotion.

Viewpoint

In the year 1955, due to increased competition, poor management and marketing, and a failure to respond to the changing needs arising the company began to experiences challenges and made strategies to combat rivalries, He became a exclusive franchise agent of McDonalds system incorporation in 1956 then hired Harry Sonneborn as a head of McDonald’s finances, And after that Fred Turner replace his position in 1967.

In 1984 Ray Kroc passed away. And in 1990 Fred Turner is replaced by Michael Quinlan. McDonald’s continue to struggle, in response to this Quinlan in early 1999 chose Jack Greenberg over Jim Cantalupo to be the new president, CEO and chairman of board. In January 2003, Jim Cantalupo became a chief executive officer chairman of McDonald's and implement new strategy which called “ Plan to Win”.

Statement of the objectives

Must objective

1. Make concrete strategy

2.Healthier menu items

3. Combat rivalries

Want objective

1.Convenient price

2.Delivering exceptional customer service

3.To expand in more countries

4.To make the restaurant cleaner and more modern

Statement of the problem

Cause: Competitive / New entrants

McDonalds is facing a heavy competitive tension between top 5 fast food hamburger chain (Burger King, Wendy's, Hardees and Jack in box)

Effect: Losing market share

McDonalds make it more difficult to enter the market because new entrants

are faced with price competition from existing chain restaurants.

Cause: Unhealthy food

Due to customer preferences began to change due to technological advances such as microwave oven, and increasing health consciousness that lead to decrease consumption of fried food and red meat.

Effect: Decreasing of consumer loyalty

The McDonalds customer service and also drive-thru delivery is weak, and its food quality is not sufficient to compete with other top 5 fast food competitors who has greater food quality, resulting in low revenue.

ENVIRONMENTAL SCANNING

E.1 a.Internal environment

Area Strength Weakness

Marketing

Human Resource

Finance and Accounting

Promotions

• Successful advertisement and brand name, such as celebrity Endorser like Justin Timberlake and other popular singers as a new advertisement scheme.

• Ability to expand internationally.

• Hamburger University of Training program for McDonald’s franchise owners and store managers.

• Delivering outstanding service “Speedy service system”.

• Ranked first in market share.

• Weak product development

-Focus on healthier dieting by consumers.

• Controlling quality with franchise operations.

-Quality concerns due to franchised operations and tension between McDonalds and franchisees because of increased domestic expansion led to cannibalization in existing franchises.

• Market share loss due to competition.

- subject to the risk of losing market share.

E.1 b.External environment

Area Opportunities Threats

Degree of Competition

...