CASE STUDY ANALYSIS ON

MCDONALD'S ADVENTURE IN THE

HOTEL INDUSTRY
ANGITA
20182MBA0015
INTRODUCTION
McDonald's Corporation is an American fast food company, founded in 1940 as a restaurant operated by Richard and Maurice
McDonald, in San Bernardino, California, United States. They rechristened their business as a hamburger stand, and later turned the
company into a franchise, with the Golden Arches logo being introduced in 1953 at a location in Phoenix, Arizona. In 1955, Ray Kroc,
a businessman, joined the company as a franchise agent and proceeded to purchase the chain from the McDonald brothers. McDonald's
had its original headquarters in Oak Brook, Illinois, but moved its global headquarters to Chicago in June 2018.

McDonald's is the world's largest restaurant chain by revenue, serving over 69 million customers daily in over 100 countries across
37,855 outlets as of 2018. Although McDonald's is best known for its hamburgers, cheeseburgers and French fries, they feature
chicken products, breakfast items, soft drinks, milkshakes, wraps, and desserts. In response to changing consumer tastes and a negative
backlash because of the unhealthiness of their food, the company has added to its menu salads, fish, smoothies, and fruit. The
McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated
restaurants. According to two reports published in 2018, McDonald's is the world's second-largest private employer with 1.7 million
employees (behind Walmart with 2.3 million employees).
REVIEW
McDonald's, one of the most powerful corporations in the
world today, opened its first hotel in 2001 in the Swiss town
of Rumlang, right in front of the airport. One of the reasons
for opening the hotel was to continue McDonald's successful
hospitality philosophy. The corporation is also known
worldwide for its prompt service restaurant business, which
offers low-cost fast food, a friendly atmosphere, a clean
environment, and a great location, especially for children.
The corporation also has a history with the stock market. The
stock exchange is like their restaurant all over the world. The
corporation is part of the Dow Jones index, which is
exchanged in Paris, Tokyo, Toronto, Frankfurt and London.
As soon as the success of the exchange began to see success,
misfortune came. "Within a few months - between November
1999 and February 2000 - the stock fell from 48% to 32% per
share (Michelle 2005)." The reason was that McDonald's had
just been completed in the United States.
The general management came up with a perfect idea: to help
countries develop their core competencies. The idea was to
"create the most profitable and profitable restaurants in the
corporation to develop their core competencies for use as a
whole model, and 2) (Michelle 2005)."
The entire Golden Arch Hotel project began when CEO Urs
Hammers was given the green light in 1999 by the Chicago
Executive Board. His idea was backed up because his
background was in a hotel. McDonald's entered the Swiss
market with two middle class hotels. Selected locations were
in Zurich and Lolita for a variety of reasons. Zurich was close
to the airport, young and old for different reasons, and there
was a high occupancy rate. Lilly was selected as a high-traffic
area near A-1 Interstate. Rumlang was chosen because it was a
small town on the shores of Zurich that attracted many young
and old. "A major expansion of the airport will increase its
capacity by 50,000 in the first decade of the new millennium
(Michael 2005)."
REVIEW
The hotel market in Zurich was booming under several
building projects. Growth was so rapid that analysts predicted
even greater exposure in the near future. In a highly
competitive hotel market, Golden Arch hotels later faced
challenges that are lucrative to target key customer segments:
travel groups, business travelers and regular travelers.
After some successful times, McDonald's met a lot of road
blocks in the Swiss market. Despite doing well in the hotel
business, the professional analyst began to question whether
the hotel business was in line with McDonald's overall
strategy. As the industry was performing well, hotel operators
built more hotels inside Zurich and occupied hotel beds.
Third, there was the lack of a labor market for the growing
hotel industry. Hammer faced the following questions in the
Swiss market.
Neither customer service experience nor ratings were in favor
of the Golden Arch Hotel. Many consumers complained that
they did not receive the same reception from McDonald's
restaurants. Most of the time the front desk staff was not
present or friendly with them. The beds in the rooms were
electronically operated and looked like hospital beds, and it
was difficult to walk on hard floors. There were also a lot of
complaints about this bar because consumers feel like they are
in an airport lounge in a small town. The rooms also had
wireless keyboards for computers for users to access the
Internet, which most users were taught was very advanced for
2001. Overall, the hotel's four-star image was highly rated
because it did not match its image. The hotel was located in
an isolated area, forcing customers to keep Macs. Donald's
food during his stay which sometimes made him sick.
APPLICATION
When entering a variety of businesses, I think McDonald's
needs to make sure they have an integrated marketing strategy
that fits well into their overall strategy. "Based on the concept
of a holistic marketing organization, marketing needs to
integrate all the processes facing consumers so that customers
see a face and hear a voice when they interact with the firm”.
 I think the corporation should create a new department
that looks at the core competencies of all the countries
and makes sure that they are connected to the overall
voice, mission and brand of the company in which they
are moving.
 In addition, all basic capabilities will be able to be
extended to other countries. While it is important for
McDonald's to develop its strategy and product offerings
in different countries, it must adhere to its core
competencies globally.
 "Because Golden Arch caters to a wide variety of clients –
frequent individual travelers, business travelers, group
travelers, airline employees and layover travelers, they
need to analyze their market to see if they can What kind
of food will you enjoy during the hotel stay. Nowadays I
think most travelers want more than fast food while
staying at their hotel.
 McDonald's should have its own luxurious design,
comfortable beds, and high-end fast food offerings that
include appetizers, entries, and desserts that help
customers feel at home.
 Although customers live for a certain period of time, it
can be incorporated into their experience targeting
different customer segments including cleanliness,
consistent customer service and great environment as well
as high end fast food.
RESPONSE
As we all know, McDonald's is a popular collaboration in the  I also learned that McDonald's ran out of customers and
world. I think they also recognized the brand in the fast food money, when it was decided to go into the pizza business.
restaurant category. They are one of the fast food restaurants
that has also contributed to providing affordable food to  The reason for his failure was similar to why he failed in
consumers globally. the hotel business. They offered products that did not differ
much from the current market price suggestions.
 I think McDonald's has to rely on the strength of its
corporate brand for a good common-sense experience.  It is important to make sure that you provide the right
product that will be sold in the industry.
 Similarly, the McDonald's tradition offered world-class
customer service and an unbeatable price for the Golden  If they want to be as successful as their fast food brand,
Arch Hotel should have been offered. I'm sure it would they are already doing well in the fast food business.
have been a great help for consumers to buy their products.
 Now that we have recognized that the McDonald's brand is
not only superior, but also that consumers trust their brand,
their ability to grow in the hotel industry, they need to
know the market. Analyze how their customers really
understand what brand they are.
 I think they should gain the trust of their customers first
before they can make a profit.
 DESIGN AND USE OF
CUSTOMER EXPERIENCE
TECHNOLOGY
 Customers reactions after visiting and staying in the In DESIGN
Golden Arch hotel, was not very pleasant. Many visitors  They had a design of curved wall in rooms which they
who came to the McDonald’s restaurant did not notice the
even got patented.
signage of the hotel.
 There were movable beds in the rooms and a futuristic
 So, not many customers were aware that the hotel was shower.
situated in that locality.
In TECHNOLOGY
 Quite often, there were no front desk employees to receive  They had a keyboard in each to operate T.V and internet.
the customers and they were unfriendly.
 Automation for check in and check out.
 The beds in the room which were electronically operated  Custom made trolley so that customers could carry their
looked more like a hospital bed. own luggage.
 The customers complained about the bar ambience as they
felt it was very unwelcoming and quite similar to a small
city airport lounge.

 The rooms had wireless keyboards for the customers to

access internet.
 UNIQUENESS OF THE GOLDEN
ARCH
McDonald’s had their uniqueness with features. To name
a few, luggage handling being provided by a custom-
made trolley, every operation being handled
automatically by credits cards reducing the human
interface eventually reducing the time, and patented
curved walls in the hotel rooms and a damn new
futuristic shower in the bathroom. These all features
made the customers feel delighted.
POINT OF PARTY (POP) AND POINT
OF DIFFERENCE (POD)
 Using the brand resonance pyramid, it can be said
that in order to create brand resonance with
customers.
 Brands need to deliver both functional performance
and meaning and imagery that customers need.
 The functional performance and imagery is related
to the point of parity and point of difference
established by the brand.
 SERVICE RECOVERY
SERVICE FAILURE

 Slow service  Quick service

 Wrong Billing  Discounts in Billing
 Conflicts with customers  Smooth handling

The customers are dissatisfied with services which is provided by the golden arch hotel as the employees deliver the
service very slowly to them and sometimes there are no employees to receive or welcome the customers at entrance of
the hotel. The bed of the room in the hotel is of no quality. More over the employees do not provide the solutions to its
customers for the problems that they face in the hotel. The firm has promoted itself among the customers their best.
There are also service recovery process which can be used by the firm to recover the service failure and satisfy the
customers. Once the firm know where they are lacking or failed to provide the service the firm can take the necessary
actions to recover the service failure effectively.
SERQUAL MODEL

 Tangibility: This dimension deals with modern looking equipment's and visual appeals of the hotel. Tangibility deals
with the appearance of physical facilities, equipment and communication materials. The Golden Arch Hotel has to
have a modern looking equipment (Hotel’s physical appearance, reception desk, pamphlets, paperwork etc.).
 Reliability: This dimension has a direct positive effect on perceived service quality and customer satisfaction. It deals
with the ability to perform the promised service dependably and accurately. The firm has to deliver the promised
service to the customers if their customers have any problems the firm has to take initiative to solve it.
 Responsiveness: It deals with the Willingness to help customers and provide prompt & accurate service. Employees
are liable and should show honesty with their customers.
 Assurance: It deals with the Knowledge and courtesy of employees and ability to inspire trust & confidence. The
employees of the firm have a full information about their work and what services had to be provided to its customers.
 Empathy: It deals with the Caring and providing individualized attention to its customers. The employees of the firm
should be willing to solve the problems of the customers as it is their responsibility.