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Macdonald in t he uk

Case code : BSTR339


Period : 1974-2009
Pub Date : 2009
Teaching Note : Not Available
Organization : ‘ 's Corporation
Industry : 

Countries : UK
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The origins of McDonald's date back to the 1930s,


when two brothers Richard "Dick" J. McDonald
and Maurice "Mac" McDonald opened a
restaurant called Airdrome in Arcadia, California,
that sold hot dogs, tea, and coffee...

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In the early 1970s, the UK was the only market


left untapped by McDonald's in Western Europe.
The reasons for the company's late entry into the
country were high real-estate costs and the prices
of raw materials such as beef. Besides, the
unpopularity of drive-in restaurants, which were
relatively unknown in Britain till the 1970s,
delayed McDonald's entry into the UK...

   

In the mid-1980s, members of the London Greenpeace started a campaign against the business
practices of McDonald's. In 1985, they launched an "International Day of Action against
McDonald's" which was held on October 16 every year after then. In 1986, the activist group
came out with a six-page pamphlet called "What's Wrong with McDonald's?-Everything they
don't want you to know."...

       

In 2003, McDonald's introduced the "Plan to Win" strategy globally after it reported its first
quarterly loss as a public company. The loss amounted to US$ 344 million. The strategy was a
business concept developed by McDonald's in order to attract more customers, increase brand
loyalty, and become more profitable as a business...

Ô   Ô 
Easterbrook , who replaced Beresford as McDonald's CEO in 2005, expressed his desire to get
McDonald's back to the basics - which was to serve burgers not salads. According to him,
healthier menus accounted for less than 10% of the chain's sales and that he saw no reason to
continue with them...

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McDonald's business in the UK was driven by five factors which were a part of its "Plan to Win"
strategy. The first one was being able to provide value for money by offering food at lower
prices to customers...

  

With its entry into the UK, McDonald's introduced American style fast food which was quite
different from the English taste. For instance, for making French fries, McDonald's used
imported russet potatoes. The milk shakes available at McDonald's were very thick and different
from the ones available at local fast food chains...

      

McDonald's promoted its brand image in the UK


through the use of digital media like the Internet,
websites, online promotions, e-mails, online
games, and TV commercials. These initiatives
were meant to create awareness among customers
regarding the quality of the food, nutrition, health-
related information, menu choices, etc. at
McDonald's...

  

As of 2008, McDonald's employed about 72,000


employees across all of its restaurants in the UK.
The fast food giant was one of the largest
employers of young adults in the UK, with an
increasing number of candidates applying to work
in hourly positions...

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McDonald's restaurants in the UK operated as part of the local community. In order to protect the
local environment in which it operated, the company implemented ethical practices across its
business. Litter bins were found outside all McDonald's restaurants...

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In 2007, sales in the UK were up by 4.6% and McDonald's was slowly gaining market share in
the country. In 2007, its sales in Europe witnessed an upward curve, growing by 3.9% in
February, 4.1% in both May and June, 4.3% in July, 4.9% in August, 5.3% in September, 5.4%
in October, and 5.6% in November...

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Despite delivering satisfactory performance in the UK in 2009, experts felt that McDonald's had
some tough challenges ahead in that market. Over the years, the company was accused of
making products with high fat content and it was held responsible for the growing problem of
obesity in the UK...

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Despite the economic downturn, McDonald's business continued to grow in the UK. Industry
experts opined that though McDonald's was not recession proof, it was not affected by the
economic downturn as its sales and customer visits continued to grow in the UK...