In March 2015, Steve Easterbrook became CEO after his predecessor's turnaround strategy did not succeed. McDonald's was facing problems with the financial aspect of the corporation despite the overall market being on the rise. The company's sales rate declined and it experienced a decrease in its income as well. The company is looking into developing a better strategic identity. How should McDonald's Corporation respond to the recent decrease in sales and current consumer trends?
Marne L. Arthaud-Day; Frank T. Rothaermel
Harvard Business Review (MH0037-PDF-ENG)
January 14, 2016
Case questions answered:
What should McDonald’s response be to the recent decrease in sales and current consumer trends?
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McDonald's Corporation Case Answers
McDonald’s Corporation, known as the American success story, has been a world leader in the fast-food industry since its inception. Founded in 1940, McDonald’s catered to bringing simplistic meals to American households at rapid speed. With a focus on convenience and affordability, it was difficult to imagine a better business plan.
However, following the 2008 recession, net income decreased as much as 15%, and shares kept falling, although the market itself recovered in the following years. Some executives suggested streamlining the menu and catering more directly to overseas locations, while others suggested increasing the quality of their products to compete in the post-recession era.
In order for McDonald’s Corporation to remain the leader in accessible food, they should focus their efforts on minimizing their menu to key products and reducing workers employed at restaurants with a shifted focus to technology adoption and allocate those savings to develop a more inviting, unique fast food experience.
McDonald’s has over 121 menu items in each of their restaurants across the world (Exhibit 10). However, according to the case, about 30% of McDonald’s sales come from their 5 main products: Big Macs, Hamburgers, Cheeseburgers, Fries, and McNuggets.
The CEO, during the rollout of “All-Day Breakfast,” made it a point to only include the best-selling items in its breakfast menu offerings, so the same thought process should be adapted to the rest of McDonald’s menu.
McDonald’s Corporation should limit the menu to…
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