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Statement of the Problem What are the set of appropriate strategies that can be implemented to increase McDonalds Corporation sales growth in the United States since it had slowed down, therefore, incurring a below the industry average?


Statement of Objectives 1. To look for hits to reverse the earnings decline of McDonalds. 2. To come up with a set of appropriate company strategies in order to stay ahead of competition for.


Areas of Consideration One of the useful strategies that can help identify the relevant factors in analyzing and solving the

problem is by using the SWOT analysis. This strategy allows us to look closely to the strength, weaknesses, opportunity and threats of the company, that can be useful in coming up with the appropriate strategies. Strengths 1. McDonalds ranked no. 1 in the fast food industry especially hamburger segment. 2. Recognizing the importance of drive through customers by increasing speed of drive through 3. New Tastes menu food strategy of McDonald ( for a limited time offer) brought units to reverse declining earnings. 4. Fore fronting chicken sandwiches menu to head on with that of competitors. 5. Heavy investment on successful advertising and public image building. (i.e. Ronald McDonald house Charity). 6. Diversifying its offering into gourmet coffee shop the McCafe. 7. Dynamic market expansion new products and special promotional strategies.

Weaknesses 1. The company, being in the fast food industry, has the Cheap and greasy image.

2. Absence of salad menu and permanent array of value-priced offerings

3. Absence of more chicken sandwiches options

4. A more comfortable surrounding and better dining experience Opportunities 1. Drive through sales are expected to grow three times faster than on premise sales which most chains already recognize the importance of drive through customers(65 percent of sales). 2. Growing trend of heavy fast food restaurant users which comprises 20 percent of customers and generally described a 30 year old single working age that have specific interest and preferences. 3. Growing trend to non-hamburger sandwiches. Threats 1. A growing trend showing the move of by customers to non-hamburger sandwiches. 2. Variety of microwave meals and sandwiches available readily in supermarkets, convenience stores and gas stations. 3. Most other hamburger chains continue to strategize discounting and offer a variety of new products to attract customers. 4. Major competitors for hamburger segment: Burger king, Wendys and Hardees. 5. Major competitors for non-hamburger segment: Pizza Hut. KFC, Taco Bell and Subway. 6. Increase in the fast casual segment brought major change in the fast food industry which includes competitors like Boston market, Panera bread co. and Atlanta Bread co.

7. Slow growth rate of quick service restaurant about 2 percent a year compared to the fast casual sector that has a 20 percent growth a year. 8. Growing dissatisfaction with the quality aspect of McDonalds due to consumers healthier food preference. 9. Baby boomers dont consider fast food as appealing food alternative. 10. Burger King is developing a more permanent, marketing strategy moving away from its previous tactical approach. 11. Hardees sales spiker tactics, the mid price sandwiches option. 12. Wendys has the strongest same store sales gain among all the major burger chains. IV. Alternative courses of action

1. McDonalds has to diversify into a fast casual restaurant. 2. McDonalds has to re-position itself as a real fastfood by improving the speed of service both on premise and drive through. 3. McDonalds has to offer a consumer budget meal. Wide array of food sandwiches and salads and improve further the McCafe by making it a venue of healthy and light meals. More over McDonalds should also design a multi drive- through. V. Analysis of Alternatives

Alternative 1 The opportunity to diversify into a fast restaurant set up of McDonalds would allow the company to build up its image into a premier food chain moreover taking advantage of the growth rate of 20 percent per year that would give McDonalds its leverage because of its position as a market leader. On the other hand, such move would be too costly for the company since it has to undergo a total makeover in order to create that fast=casual restaurant image. Alternative2 Since 65 percent of sales in the food chain industry has something to do with speed, it is best for McDonalds to conquer and dominate such offering; speed in service This will allow McDonalds to position itself as a premiere customer service provider by highlighting its speed in service as its main

advantage. However the fall back might give McDonald a low quality food fewer food choices due to the constraints in time preparation. Alternative 3 Due to a lot of threats from the competitors strategy both for hamburger and non hamburger segment, alternative 3 allows us to address the issues with long term and short term approaches by competing head on its sales-spiking strategies, grabbing market share in competitors strong product and capturing the large population of baby boomers who prefers a healthier alternative. Moreover the multi-drive through would further increase the service speed level for drive through customers. However, this strategy will be very risky it has to undergo in a careful timing and precision in order to create a good impact.


Decision Statement


Implementation Program

VIII. Lessons Learned from the Case

VII. Implement