REMINISCING MCDONALD’S

            The company has gone through quite a few changes with its changing CEO’s over the years, but the company seems to be on track with CEO Jim Skinner, named in 2004. Skinner was named the new CEO just in time to clean up after McDonald’s first ever quarterly loss. He succeeded by showing that McDonald’s revenue had climbed 11% during 2006 and net profits had climbed 36%. (Dess, Case 40 Pg. 1)

            Jim Skinner had to clean up a big mess after the 2003 slump, and did so by coming up with a strategy to turn everything around. His strategy had to consist of staying competitive with the numerous other fast food restaurants popping up all over the world. In order to maintain this, they had to reorganize the way they presented themselves to the community. Jim Skinner did so by cleaning up the customer service, cleaning up and modernizing the physical buildings, and changing the menu to the changing tastes of their customers using techniques of “Total Quality Management”. McDonald’s also introduced their slogan “I’m Loving It” to reach out to the younger customers. The advertising is very much targeted toward teens and young adults. (Dess, Case 40) 

 

 

ISSUES AND CHALLENGES

RUSH TIME: Which refers during the time break for working hour. Customers often complain about the disordered multiple waiting lines to approach the service counter. When they fail to examine the menu, customer often will be intent on looking for ways to improve their position in the line. The confusing menu design will cause the customer who stand a distance behind the service counter not able to read the menu. With this matter, the customers will be undecided when is their turn to order and prolong the ordering process which cause dissatisfaction of other customers.

McDelivery: McDelivery will put a risk in the safety of workers who involve in delivery as they have to deliver in fast speed to ensure the food being deliver in the limited time or else they will being penalize.

THREAT OF NEW COMPETITORS: The threat of new competitors for McDonald’s and the fast-food industry is low. With so many different kinds of fast-food restaurants already in the industry, entering at this point would cause struggle for the new entrant. (McDonald’s 2007)

BARGAINING POWER OF SUPPLIERS: According to Siehoyono (2005), there are 3,700 new outlets being built each year in the U.S., meaning the power of suppliers is not an issue for McDonald’s.

BARGAINING POWER OF BUYERS: Consumers have more power over buying McDonald’s products because they can demand what type of products they want to see from them. Today, consumers are demanding healthier food and beverage choices from fast-food restaurants such as McDonald’s. After the documentary film “Supersize Me” by Morgan Spurlock came out in 2004, McDonald’s had to reclaim its name by showing America that their company cares about the health of their customers and cut out their “supersize” program.

SUBSTITUTE PRODUCTS/SERVICES: In the fast-food industry, including McDonald’s, the threat of substitutes is greater now more than ever with the convenience food industry growing. More convenience food stores are offering similar products as the fast-food restaurants. The convenience store / gas station, Quik Trip, sells many food items such as hot dogs, egg rolls, pizza stuffed breadsticks, and countless beverage choices. (Siehoyono 2005)

COMPETITIVE RIVALRY: According to Siehoyono (2005), “fast casual” food chains such as Subway are tougher competition to the fast-food chains in both the U.S. and international industries. Some franchisers were also complaining that McDonald’s was granting too many franchisees too close to each other and actually stealing business away from each other.