Burger Wars Case Highlights
Hartley Highlight
Burger Wars
McDonald’s is a well-known fast-food chain restaurant found around the world. They had consistent growth for decades until recently during the 90’s and early 20’s. Although not their official founder, Ray Kroc developed and exploded this fast-food restaurant into what it is today. He insisted on clean restaurants that were family friendly and fast food preparation. Large growth in the early years of the company eventually plateaued bringing about the companies struggles in the 90’s. Policy changes and deteriorating franchise relations created failing realities within the company. Three major issues which occurred were the market-share game in which aggressive expansion policies allowed more restaurants to open while others close by failed, declining restaurant standards with stringent policies creating tensions between corporate and franchises, and large growths of competitor restaurants. Each of these issues helps in the decline of growth in revenue and stock for the company. Knowing the problems is the fastest way in solving them. With the promotion of James Cantalupo, policy changes and a head-on approach started to bring the company back on track. After 16 months, McDonald’s with the help of Cantalupo was able to restore sales and profit. There are many lessons that can be learned from this case. Continuing from the issues discussed before, it is wise to continue this discussion to explain why these were issues and how something good can come from them. Aggressive expansion to create a large market-share initially brought McDonald’s into the spot-light and allowed their brand to become popular. This is great until product prices become too low and franchises start competing against each other. McDonald’s franchises’ started becoming irritated at the closeness in proximity that corporate was putting “competing” franchises. This created tension between the franchises and corporate. Eventually, the market-share strategy was
Burger Wars
McDonald’s is a well-known fast-food chain restaurant found around the world. They had consistent growth for decades until recently during the 90’s and early 20’s. Although not their official founder, Ray Kroc developed and exploded this fast-food restaurant into what it is today. He insisted on clean restaurants that were family friendly and fast food preparation. Large growth in the early years of the company eventually plateaued bringing about the companies struggles in the 90’s. Policy changes and deteriorating franchise relations created failing realities within the company. Three major issues which occurred were the market-share game in which aggressive expansion policies allowed more restaurants to open while others close by failed, declining restaurant standards with stringent policies creating tensions between corporate and franchises, and large growths of competitor restaurants. Each of these issues helps in the decline of growth in revenue and stock for the company. Knowing the problems is the fastest way in solving them. With the promotion of James Cantalupo, policy changes and a head-on approach started to bring the company back on track. After 16 months, McDonald’s with the help of Cantalupo was able to restore sales and profit. There are many lessons that can be learned from this case. Continuing from the issues discussed before, it is wise to continue this discussion to explain why these were issues and how something good can come from them. Aggressive expansion to create a large market-share initially brought McDonald’s into the spot-light and allowed their brand to become popular. This is great until product prices become too low and franchises start competing against each other. McDonald’s franchises’ started becoming irritated at the closeness in proximity that corporate was putting “competing” franchises. This created tension between the franchises and corporate. Eventually, the market-share strategy was