The Turnaround Plan of Mcdonald's: A Long Way to Go

This case won the second prize in 2016 John Molson MBA Case Writing Competition



Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

ABSTRACT

In May 2015, Steve Easterbrook, CEO of McDonald’s Corporation (McDonald’s), one of the world’s leading fast food restaurant companies, announced a turnaround plan to revive the sagging fortunes of the company. This came in the aftermath of several consecutive quarters of sales drop. McDonald’s same store sales in the US slipped and the fall was attributed to lower customer traffic, growing competition, and customers’ preference for healthy food besides overstuffed menus — McDonald’s had added several new items to its menus in order to bring in new customers. Compared to 2007, 40 new items had been added to the menu by 2015. In several of its international markets too, McDonald’s performance was not up to the mark. At the same time, the franchisees who owned more than 80% of all the McDonald’s restaurants were staring at complicated menus, falling sales, growing expenses, and dropping service levels...

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Issues

The case is structured to achieve the following teaching objectives:

  • To understand the impact of a dynamically changing competitive environment.
  • To recognize the need to understand customer requirements and bring about appropriate strategy changes.
  • To identify the measures needed to contain the downward spiral of a company in trouble.
  • To retain customers in the face of growing competition and changing preferences and perceptions.
  • To understand how competitors’ strategies impact business decisions.
Contents
PLAN TO FIX
ABOUT MCDONALD’S
TROUBLE ON THE MENU
INTERNATIONAL MARKETS
THE TURNAROUND PLAN
WHAT NEXT?
EXHIBITS

Keywords

McDonald’s, Turnaround, turnaround strategies, decline; evaluation of a turnaround plan; Steve Easterbrook; market segments; franchisee; competitive strategy; restructuring

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