Case Study Mcdonalds

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CASE ANALYSIS

I. Title:McDonald’s: Polishing the Golden Arches

II.View Point: Chairman and CEO of McDonald’s

III. Time Context:Early 1990’s

IV. Problem Statement:McDonald’s difficulty in reviving its sales

V. Statement of Objective:To be able to increase the over-all sales of McDonald’s by
5 to 7 percent by the end of 2007

VI. Areas of Consideration:

* Strengths:
1. Assembling of a management team of young executives who have the energy and will give fresh ideas to the table 2. James Cantalupo’s efforts to revive McDonald’s resulted to growth in sales over the last three quarters 3. McDonald’s maintains its core strengths—an unwavering focus on quality and consistency—while carefully experimenting with new options 4. Strong brand name, image and reputation

* Weakness:
1. Lack of employee trainings reflected on its poor service ranking 2. McDonald’s often tended to miss the mark on delivering critical aspects of consistent, fast and friendly service, and an enjoyable experience for the whole family. 3. Unhealthy food image

4. Losses due to fierce competition

* Opportunities:
1. Globalization, expansion in other countries
2. Diversification and acquisition of other quick-service restaurants 3. Growth in fast food industry
4. Due to increasing awareness on healthier eating, McDonald’s may introduce new healthy items on the menu to bring back their lost market

* Threats:
1. Ever-changing food trends as well as variations in the tastes of consumers 2. Stiff competition from quick meals of all sorts that can be found in supermarkets, convenience stores and even vending machines 3. Franchisees have been leaving McDonald’s

4. Increasing number of fast growing rivals
5. Declining market share
6. Increasing awareness on healthier eating

VII:Assumptions:None

VIII:Alternative Courses of Action:

ACA 1: New Business Channels - To boost sales, McDonald’s will look at new business channels instead of rapid expansion. New business channels will include home delivery, kiosks, breakfast, extended hours, ordering thru internet and drive-thrus.

ACA 2:Market Expansion - acquiring new locations, getting more franchisees, and spreading more stores worldwide.

ACA 3:Products and services innovation – McDonald’s to offer salads, fruit, roasted chicken, bottled water and other low fat and calorie conscious alternatives.

IX:Analysis:

ACA 1:

New Business Strategies - To boost sales, McDonald’s will look at new business strategies instead of rapid expansion. New business strategies will include home delivery, kiosks, breakfast, extended hours, ordering thru internet and drive-thrus.

Advantages| Disadvantages|
1. Improved efficiency / Improved service2. The use of internet will aid / help busy working employees to order foods without going to the store.3. Growth in revenues through greater product availability and more customized products4. Accessibility and comfortability for customers when they no longer have to go to the McDonald’s store and just wait for few minutes to have their orders delivered right to their home5. Greater customer satisfaction through timely deliveries and accurate responses to customer inquiries.| 1. Effective management of these channels of distribution involves additional cost as well as forging better relationships among channel members2. Extended hours entails extra manpower and salaries expenses, as well as utilities expenses and other operating expenses3. Internet is not 100% reliable. 4. Extended hours of work may affect employee's levels of fatigue which could then lead to health or safety hazards, as well as reduce productivity, and increase turnover and absenteeism.|

ACA 2:

Market Expansion - acquiring new locations, getting more franchisees, and spreading more stores worldwide.

Advantages| Disadvantages|
1. More stores, more income2. Opportunity to have a larger market share3....
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