Zeeshan's case individual deliverable

McDonald's Case Analysis Introduction: McDonald's has been an iconic fast-food chain in the history of American dining culture. However, there have been several internal and external problems, causing them to reevaluate their business strategy. This case traces the development of McDonald's from its modest beginnings to its current position as a worldwide leader, illuminating key turning points and internal conflicts including menu complexities and franchise relationships. Despite these issues, McDonald's has set out on a transformative journey, refreshing menus, promoting sustainability, and working to address societal poverty issues. We gain understanding of the complexity of corporate-level strategy and operational intricacy in the fast-food sector as we examine McDonald's search for reinvention, larger market share, and an enlarged stakeholder base. Problem Statement: McDonald's Struggles with Declining Sales Growth, Reputation, and Shifting Consumer Preferences Early in the 2020s, McDonald's, a well-known global leader in fast food, was faced with an uncertain conflict that put its long-standing dominance and commercial relevance in jeopardy. The abrupt firing of CEO Steve Easterbrook amid charges of wrongdoing threw a cloud of doubt over the business and called into question its corporate culture and continuity of leadership. Even though Easterbrook produced outstanding financial results, his departure shook the franchisees and staff. McDonald's had to deal with changing consumer demands at the same time. The company had to redesign its menu in response to the rise of health-conscious consumers, switching out processed foods for sustainable, healthier options. Fast-casual shops like Chipotle and Panera, which serve fresh, customizable food, have grown in popularity, taking away once- loyal customers, especially millennials. Internally, issues with personnel and service quality arose, and staff skills declined because of insufficient education and training. Consumer surveys revealed that McDonald's service and product quality dropped below that of competitors, raising questions about whether they were meeting customer expectations. Due to the company's considerable menu development, which was intended to compete with fast food chains, its primary selling points of speed and affordability were compromised by complexity, higher prices, and extended preparation times. While the COVID-19 epidemic required adaptable answers to shifting consumer behaviors, including advances into the digital world with virtual restaurants and delivery services, new players influenced the burger experience in the larger external landscape by emphasizing quality and customization. Internal Issues: Some of the issue that McDonald's is facing internally are Quality issues, Market saturation, and Franchisee Relations. The case shows that McDonald's over the years experienced a reduction in employee expertise and service quality due to a number of causes. By 2014, there were 121 items on the menu, which increased preparation times and complexity in the kitchen. According to surveys, this had a huge impact on the service pace and order accuracy, which lagged below rivals like Wendy's and Chick-fil-A. Due to staff problems, it was decided to cut back on training, which made these quality issues worse. McDonald's needed to simplify its menu, enhance training initiatives, and place a priority on service excellence, in keeping with its fundamental values of speed and consistency, in order
to overcome this internal problem McDonald should implement "grading franchises for cleanliness, speed, and service". McDonald's faced the problem of market saturation due to the fast-expanding number of restaurants around the world. Concerns about oversaturation were raised in some places due to the widespread expansion, which perhaps reduced sales at established businesses and made development more difficult. McDonald's must carefully examine market demand and saturation levels in various regions when evaluating its expansion plan. To address this problem and assure sustainable growth, restaurant openings, renovations, and market segmentation needed to take a more planned approach. Franchisees have expressed their concerns about the costs incurred by menu and service modifications, such as the "Create Your Taste" platform and customization options. Given that franchisees run a sizable majority of the outlets, franchisee relationships are essential to McDonald's profitability. According to the complaint, franchisees were concerned about the price of implementing these changes, which might total up to $125,000 per location. In order to address franchisees' concerns and emphasize the benefits of these innovations, such as the ability to draw in new consumer segments and boost sales, McDonald's needed to have open communication with franchisees. Effectively resolving this internal issue required cooperative decision-making and franchisee support systems. External Issues: On a business level, McDonald's is facing external issues, which their management needs to consider to be successful in the fast-food industry. Some of the main issues McDonald's faced are Market innovation, Covid 19, and Competition. For McDonald's, the COVID-19 epidemic offered both difficulties and opportunity. The pandemic first caused disruptions in the fast-food industry, with lockdowns and limitations impacting dining-in options. With the help of its robust drive-through and delivery infrastructure, McDonald's was able to adapt by taking advantage of an increase in takeout and delivery orders. Through this tactical reaction, McDonald's was able to keep up a consistent stream of sales throughout difficult times. As consumer preferences evolved toward contactless options and convenience, McDonald's needed to keep concentrating on improving its digital ordering and delivery capabilities to solve this external issue. McDonald's has shown an interest to look into cutting-edge ideas like the "metaverse" and virtual restaurants. This external problem emphasizes how McDonald's must adapt to shifting consumer tastes and advances in technology. McDonald's entry into the metaverse and virtual restaurant concepts are mentioned in the case, demonstrating its dedication to continuing to be inventive and relevant in the digital age. In order to engage tech-savvy customers and keep its competitive advantage, McDonald's must continue to invest in technology, including mobile apps, online ordering, and virtual experiences. McDonald's is up against strong competition on several fronts. Established competitors like Burger King and Wendy's are still fighting for market share, so McDonald's must consistently stand out and present compelling value propositions. McDonald's also faces competition from new "better burger" restaurants like Five Guys and Shake Shack, which focus on offering tastier burgers and fancier eating experiences. To be competitive, McDonald's must constantly evaluate the quality, variety, and experience of its menu items. In order to stay relevant and hold onto its market position in the face of fierce competition, McDonald's can
benefit by tailoring its strategies to certain niches, such as by providing healthier options to satisfy shifting consumer tastes. Alternatives: According to the case study, McDonald's understood the importance of adapting to customers' shifting tastes for healthier dining options. This alternative is consistent with McDonald's continued initiative to include more nutritional dishes and offer better menu options like salads. It's important to remember that despite these initiatives, the evidence indicates that McDonald's encountered difficulties in fully embracing this strategy. For instance, the 1991 launch of the low-fat McLean Deluxe burger was not as well received. If McDonald's can properly combine its basic offers with healthy ones, considering taste preferences and regional variances, this alternative may be successful. The case study outlines McDonald's actions as part of its brand revitalization strategy to update dining establishments, modernize storefront designs, and improve the overall dining experience. Given the popularity of the McCafé idea, which brought a more premium and modern café experience, this alternative seems especially promising. McDonald's should keep funding these programs and make sure that they are appealing to today's consumers. Franchisees have voiced worries about the costs connected with such improvements, therefore it is important to be mindful about these costs. As the case study points out, McDonald's has a long history of growing globally. Although it is not stated in the case specifically, this alternative is still an option. According to the evidence, McDonald's has been looking into potential markets in underdeveloped nations. Growth can be boosted by working with nearby companies and modifying the menu to suit local food preferences, as has been done in many other nations. However, as indicated in the judgment, McDonald's should also consider the difficulties caused by market saturation. It is essential to make sure that growth initiatives are long-lasting and in line with consumer demand. Recommendations: The outcomes of the case study are consistent with the proposal to keep promoting and funding healthier menu choices. Indeed, McDonald's has acknowledged the value of providing healthier options, as seen by the addition of salads and initiatives to lower the amount of trans fats in their goods. The failure of the low-fat McLean Deluxe burger in 1991 and the necessity of balancing healthier options with its core menu are two issues highlighted by the case in this regard. To ensure the effectiveness of such initiatives, McDonald's should carefully examine customer preferences and geographical variations while pushing healthier options. Other factors
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