macdonald present

8/14/2019 macdonald present

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History

Year Events

1937 Richard & Maurice, started drive-in restaurant inCalifornia.

Mid-1950

Revenues risen to $3,50,000.

1952 First franchisee started by Neil Fox in Arizona.

1955 Kroc established McDonald system Inc.

1961 Kroc bought McDonald brothers share for $2.7

million.1965

McDonalds went Public, selling its shares OTC.

1970 Restaurants grew at an avg. of about 500 peryear.

1985

First fast food chain to provide the list of

ingredients used in its products.


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Question No. 1

McDonalds was once hailed asthe role model for fast foodindustry. In the 1980s & early

1990s, it was on of the mostsuccessful companies in thefast food industry. However, inthe late 1990s, it experienced

major problems which reflectedin poor sales. Do you thinkMcDonalds faced poor sales inthe late 1990s mainly becauseof changes in the external


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External Changes

Changing Customers preferences

Increased competition

Health issues

Economic Turmoil across Asia andEurope.

September 11, 2001, terrorist

attack. Dependent on Four Countries.

Poor consumer spending in the

restaurant industry in US.


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External Changes ( contd..)

Changing Customers preferences

- customers started to prefer eatingat home using the microwave to heat

the food.- they also started visitingcompetitors chains as they offereddiscounts.


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Increased competition

- competition from supermarkets,convenience stores etc.

- Wendys, Burger King, Pizza Hut,KFC, Subway, etc.


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Health issues

- customers became healthconscious.

- they started to select fresh foodover fatty, fried food & red meat.

- Obesity became major health

problem.- legal suits.


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Economic Turmoil across Asia andEurope.

- currency crisis in 1990 in Asian

countries.

- Economic Turmoil in Europe.

- International Sales had fallen.


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September 11, 2001, terroristattack.

- McDonalds depended heavilyon US Tourism.

- With September 11, attackthe tourism industry suffered.


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Dependent on Four Countries.

- McDonalds excessive dependenceon American, Britain, Germany &

France Markets.- These markets had reachedsaturation.


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Poor consumer spending in therestaurant industry in US.

- there was a negative growth rate of

(-2%) in consumer spending in the USmarkets.

- decline in per store sales in the US inthe third quarter of 2002.


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Question No. 2

Some analysts feel thatMcDonalds problem in the late1990s were due to its inability to

bring about a change in theinternal environment of theorganization. When were the

problem in the internalenvironment that resulted inMcDonalds poor performance in

the late 1990s ?


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Contd

Time lag in service

Lack of innovation

Deterioration of relationship

with franchisees


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Question No. 3

Many analyst feel thatfranchising is the best way togrow , more so, in international

markets. However, McDonaldsfranchise model which was verysuccessful in the 1980s took abeating in the late 1990s. What

according to you were theproblems with the McDonaldsfranchise model? In the light ofsuch problems, do you think it is

still best way to grow?


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Mc Donald kept changing its views so manyMc Donald kept changing its views so many

times that made its franchisees suspect abouttimes that made its franchisees suspect about

companys stance.companys stance.


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Question No. 4

Soon after taking over as theCEO of McDonalds,Cantalupo had taken various

steps to reverse thedownward slide ofMcDonalds emerge as the

Great American Meal onceits youth Vigor?


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Steps taken byCantalupo

Up or Over grading system

More focus on customersatisfaction then on the numberof outlets

Emphasis on cleanliness, serviceand staff productivity to attract &retain customers


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Steps taken byCantalupo

Simplified operations

National ad campaigns instead ofregional, so that the message is

clearly conveyed to thecustomers


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THANK YOU

Documents

macdonald present