McDonalds: A Case Study
McDonalds is widely considered the “king” of fast food restaurants. Started as one restaurant in 1955 by Ray Kroc, McDonalds is now a worldwide chain offering everything from a traditional hamburger to Frappuccino’s and everything in between. The McDonalds website states” Ray Kroc wanted to build a restaurant system that would be famous for food of consistently high quality and uniform methods of preparation. He wanted to serve burgers, buns, fries and beverages that tasted just the same in Alaska as they did in Alabama.” This vision is the underlying cause of success over time that McDonalds has achieved. However, not all is well as the saying goes you can never judge a book by its cover.
McDonalds earnings have declined since the late 1990’s and early 2000’s. In 2001, McDonalds profit decreased by 17 percent and there are a variety of factors, which lead to this decrease. A major reason for the sales decline is market saturation. There are many more alternative restaurants today including Burger King, Wendy’s, Taco Bell and also the not as formal sit down restaurants such as Panera and Boston Market who are taking business away from McDonalds. “Burger King is currently featuring a gingerbread cookie shake, while Wendy’s new Garden Sensations salads are doing well. On Thursday, Wendy’s announced that its same-store sales in North America were up 2.7 percent in the third quarter” (Storm 2012).
A cause for concern is McDonalds worldwide image. Despite the efforts of McDonalds marketing and PR staff, the fast food super power is known around the world as unhealthy and is associated with obesity. Parents who were once taking Case Study: Mcdonalds
their children to McDonalds on a regular basis are now decided on healthier options. The problem for McDonalds is that even though many of these
restaurants can be just as bad for a person, the others do not have the same image as McDonalds.
Today, McDonalds sales are back on their way up and the reason is that the corporation decided on an image change. McDonalds goal is to be known not as fast food but to be known as “good food fast” (Adams, 2007, 157). McDonalds is also taking a nothing to hide approach by allowing its nutritional facts about its food able to be accessed a variety of ways including at the restaurants and online or through smart phone and tablet applications. Read about
McDonald’s quality assurance.
The year 2004 proved to be the year that turned things back around for McDonalds and although there is always going to be a battle in the “hamburger war” McDonalds is currently still in the lead. “The company credited the increase to the strength of the United States market as well as new menu items, remodeled stores and credit card payment options. At the 1,100 stores that have been ”reimaged,” sales are 5 percent above the average, the company said. Another 1,300 stores will be remodeled this year” (Warner 2005).
Although McDonalds is not the healthiest option for Americans, it offers variety, it’s affordable, and is a quick fix for the average American who is on the move all day everyday. Since 2001 when its sales were down, almost every McDonalds has under gone a renovation. McDonalds is in a never-ending fight to win the fast food battle and is doing so my changing the overall image of the corporation which is continuing to grow.
Learn also which statement correctly compares the two businesses?
Adams, C. (2007). Reframing the Obesity Debate: McDonald’s Role May Surprise You. Journal Of Law, Medicine & Ethics, 35(1), 154-157. doi:10.1111/j.1748-720X.2007.00120.x
STROM, S. (2012, November 9). McDonald’s Reports Unexpectedly Sharp Drop in Sales. New York Times. p. 5.
Warner, M. (2005, January 29). Sales Growth at McDonald’s Is the Highest in 17 Years. New York Times. p. C5.