November 14, 2009
COMPANY NAME: McDonald’s Inc.
INDUSTRY: Food Service
COMPANY WEBSITE: www.Mcdonalds.com
McDonald’s as most people know is involved in the food service industry and they have been for many years. McDonald’s began in 1955 when Ray A. Kroc opened his first in Des Plaines Illinois; later Kroc bought out the McDonald’s brothers and their franchise for $2,700,000 million (Shamise, J. & Eisner, A, 2007, p. c890). This case study concentrated on CEO Jim Skinner and his efforts to re-invent McDonalds with an overall goal to increase revenue. Skinner was following the path that visionary James R. Cantalupo laid down before his unexpected death (Shamise, J. & Eisner, A., 2007). Currently the CEO of McDonald’s is still Jim Skinner and last year (2008) McDonald’s had total revenue of $23.5224 billion and that led to a profit of $4.3132 billion (Yahoo Finance, 2009). This figure is an increase from last year, when McDonald’s pulled in a profit of $2.3951 billion (Yahoo Finance, 2009). The work culture at McDonald’s can be described as a fast paced and busy environment; change doesn’t just happen by itself, it takes a team of people cohesively working together in order to bring about change.
Strengths: McDonald’s has always been a major player in the fast food industry and they seem to have a creative leader in Jim Skinner. At the executive level there is a good mix of idea share and “think tank.” This is has led McDonald’s to take a step back to listen to their customers and react appropriately. This case focused on rebuilding the image of McDonald’s in order to increase revenue and market share within the fast food industry. CEO Jim Skinner felt it was his top priority to deal with the growing concern of the unhealthy image that McDonald’s had; especially with the obesity epidemic that was taking over in the United States (Shamise, J. & Eisner, A, 2007, p. c892). By introducing new healthier cooking oils, salads, fruits, vegetables, publicly displayed nutritional information and the elimination of the “supersize” option; McDonald’s began to change consumer’s perceptions of their image (Shamise, J. & Eisner, A., 2007).
Weaknesses: McDonald’s is constantly changing its image around that it does not have a true identity. The case pointed out that McDonald’s is trying to appeal to the young, old, hip, etc.., but that kind of marketing can be destructive and can lead to alienation of one or more groups that they are trying to appeal to (Shamise, J. & Eisner, A., 2007). McDonald’s want to be known as a healthier alternative that consumers can turn to, but McDonald’s continues to make a large portion of their revenue off of the sale of unhealthy foods. Their biggest success lately being the introduction of the McGriddle breakfast sandwich, which brings in about 1 million new customers a day (Shamise, J. & Eisner, A, 2007, p. c892). Another weakness is that McDonald’s keeps introducing new menu items, but they fail to realize that this action was part of their decline in the past. “McDonald’s began to fail consistently with its new product introductions such as the low-fat McLean Deluxe and the Arch Deluxe” Shamise, J. & Eisner, A, 2007, p. c887).
Opportunities: McDonald’s is a worldwide recognized name, so it makes sense that their advertisements seem to always show a diverse group of people, hanging out and enjoying their food. The key with capitalizing on obtaining more market segments has and always will rely on the advertising that McDonald’s does. Having pop idol Justin Timberlake help to promote the “I’m loving it” slogan has helped to draw a diverse group of consumers to McDonald’s restaurants (Shamise, J. & Eisner, A., 2007). Consumers know the McDonald’s name, but they need to be reminded of what new and exciting things are going on at...