Pamantasan ng Lungsod ng Maynila (University of the City of Manila) Intramuros, Manila

GRADUATE SCHOOL OF MANAGEMENT Master in Business Administration

Case Study of McDonalds’s
Presented by: Raquedan, Arlene F. Abrigo, Glenn Joy Bautista, Elizabeth D. Abacan, Neil D. Udaundo, Edrei Y.

McDonald’s has been defining the fast food business. However. Charles Bell Time Frame April 15. During his brief tenure.Point Of view Newly appointed CEO of McDonald’s. after the death of James R. who turned around the company by introducing new additions in its menu and cutting back on its expansion plans. 2004. . McDonald’s was headed into serious trouble until the arrival of James Cantalupo. the company had been stumbling over the past decade due to its rapid expansion in the 1990s and the lack of adequate employee training. Cantalupo Executive Summary Since it was founded more than 50 years ago. McDonalds recorded strong growth in sales over the last three quarters.

should take to sustain its sales and profits growth? Statement of the Objective For McDonald’s to achieve positive growth in sales and profits though another three quarters by achieving the following objectives: 1. Upgrade operations 2. what is the best strategic move Charles Bell. Attract new customers and encourage existing customers to visit more often 3. Improve quality of service . the newly appointed CEO. James Cantalupo.Statement of the Problem With the unexpected death of its present CEO.

• Big success of the McGriddles breakfast sandwich which has been bringing in about one million new customers every day. his brief tenure has improved the company’s lackluster performance as reflected in strong growth sales over the last three quarters.Areas of Consideration Strengths: • Worldwide recognition (largest chain of outlets spread around the globe) • Prior to James Cantalupo’s death. • New CEO Bell shared Cantalupo’s focus on customer experience • The “Up and Out” grading system will ensure all branches/franchisees will have the high-level service and quality .

• Focused on what it is known for which is the Burger Business. and improving its franchisees and while putting off expansion plans • Energy and fresh ideas brought by younger executives Weaknesses: • the quality of service has not made any progress compared to its rivals • the steady decline in profit margins of McDonalds’ franchisees • the failure of the non-burger chains acquired by Cantalupo’s predecessor .

• Dependence on cutting prices in order to drive up sales. McDonald’s contributed to American societies’ obesity. Opportunities: • Opportunity to continue to build on sales by introducing another new set of product/s after success of the McGriddles sandwich • Opportunity to redesign its brand similar to what its other franchisees have done . which its franchisees are frustrated about • Consistent failures with its new product introductions • Public perception.

convenience stores and even vending machines. • Increased competition with same burger brands like In-N-Out chain and YUM! .• Opportunity to develop fresher and healthier products in its menu • Opportunity to take advantage changing customer habits Threats: • Competition has been coming from quick meals of all sorts that can be found in supermarkets.

• Public health crisis. With a growing of obesity cases among Americans. McdDonald’s will continue to be overshadowed by its products offerings (supersized meal) • Growing demand for healthier chains like Cosi and Zuizino • The risks involved in moving into the line of children’s clothing and toy .

Alternative Courses of Action .

McDonald’s will introduce new and healthier products in its menu ACA#2: Improvement of fast food operations/processes.ACA#1: Product development. Invest in the training of its workforce and necessary equipment upgrades to provide faster service/ better quality products ACA#3: Product diversification. To satisfy the preferences of consumers. toys. Product lines would include children’s clothing. interactive videos and books .

McDonald’s will introduce new and healthier products in its menu Advantages  Addresses the trend toward healthy eating  New customer experience  New products may mean new customers Disadvantages  May lose revenue from its other existing products  New R & D  Uncertainty of success depending on the customers response .ACA#1: Product development. To satisfy the preferences of consumers.

in terms of quality of service Will improve financial performance for the company and its existing franchises Disadvantages Rebuilding. Invest in the training of its workforce and necessary equipment upgrades to provide faster service/ better quality products Advantages Customer satisfaction in the longrun Will create brand loyalty due to efficient service experience Satisfied customers will eventually drive up sales/revenues Will have the chance to compete with its rivals. renovation and reimaging requires capital cost Temporary shutdown of operations due to restructuring and training Time-consuming Dilemma for franchisees whether to undergo such costly upgrades          .ACA#2: Improvement of fast food operations/processes.

toys.ACA#3: Product diversification.  Uncertainty of customer response . interactive videos and books Advantages  May create bigger appeal for kids  Will make the brand more prominent  May increase sales if successful Disadvantages  Requires royalty cost in making deals with partners relative to product lines. Product lines would include children’s clothing.

Conclusion Objectives Increase in Sales/Profits Costs Customer Satisfaction Long-term benefits Total ACA# 1 2 3 2 2 9 ACA# 2 3 1 3 3 10 ACA# 3 1 2 1 1 5 3 2 1 Legend: - Highly Favorable Moderately Favorable Least Favorable .

ACA# 2 is the best alternative.Based from the comparative analysis of all the alternative courses of action. .

Plan of Action .

c. Interview with managers Survey with customers Reverse engineer competitor’s processes Charles Bell and Store Managers 6 months 2. Engage employees in various training activities / Purchase new equipment and install to stores HR Head / Operations Head 5-7 months . Identify areas where improvements in processes and employee skills can be made a. b.Activity Person-In-Charge Time Frame 1.

Pilot run new practices / equipment Upgrades 5.3. Evaluate its contribution to quality of service and customer satisfaction 6. Set corrective actions for identified issues. Identify pilot locations to set-up new practices / equipment upgrades 4. Operational Heads and Managers of Stores 1-2 months Operational Heads and Managers of identified Pilot Stores Store Managers 6 months 3 months Store Managers 3 months .

Thank You .

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