The major issues of McDonald in this case were growing strategy that improved overall service quality and sales, and branding strategy that positioned McDonald as the healthy fast food lifestyle brand. These challenges were mainly attributed to escalating growth of franchising and global rising concern for health.
Recognizing one valuable competitive advantage of McDonald is approximately 30,000 worldwide outlets with established well-known brand name and cost leadership, the management team adopted the “Plan to Win” strategy, which was to increase sales at existing locations by improving the menu, refurbishing the outlets, and extending hours with added snacks and drinks. This strategy turned around McDonald from an unfavorable market position to a favorable market position. McDonald experienced considerable growth thanks to this strategy.
Besides, McDonald repositioned its perceptions through phrasing out supersizing, providing nutritional information on product packaging, offering healthier products, and including more fruits and vegetables in Happy Meals. It further projected it as a lifestyle brand rather than just a place to eat hamburger through large-scale outlet refurbishment, introduction of McCafes, and Micro-marketing to different target segments.
1. Major issues in this case
A. Growing in quality and sales
This issue focuses on the corporate-level strategy, which concerns whether more value is created through diversification. Initially, McDonald experienced very high growth by franchising. As more outlets flourished internationally while the grading system of franchisees disappeared, the service quality of McDonald started to decline, hurting its competitive position in terms of sales and branding.
Although McDonald had tried to acquire other fast-food chains and introduce many new products, they failed. McDonald turned around its unfavorable market position after James R. Cantalupo took the lead as...