Mcdonald's Case Study

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History McDonald’s, the long-time face of fast-food restaurants, has come under the gun from both competition and the customers themselves over the last decade. The number of competitive restaurants has increased tremendously from both hamburger joints (Burger King, Wendy’s, and 5 Guys), as well as non-hamburger restaurants (Subway, Panera Bread, and Chipotle). Customers, meanwhile, have grown tired of the fast-food mentality and at the same time have become more aware and concerned about their health. These issues have slowed down McDonald’s sales and have forced the company to change its image to increase interest among old customers while also building a base of new customers. McDonald’s roots in America go back to the 1940s when two brothers opened up a burger restaurant that focused only on burgers, French fries, and drinks. So impressed was Ray Kroc with the standard preparation procedure that he became the company’s national franchise agent and helped open 700 McDonald’s all over America by 1965 (McDonald’s History, 2010, para. 5). From that point McDonald’s has expanded both its menu (include breakfast, chicken nuggets, and salads) and locations (there are McDonald’s in 117 countries) (McDonald’s History, 2010, para 8). Through 2006, McDonald’s 13,774 stores was more than Burger King (7,534) and Wendy’s (5,948) combined (Kim, Hertzman & Hwang, 2010, p.347). Situation Analysis Over the last decade and a half, McDonald’s has slowly lost that edge it had over its competition for 50 years before. Despite still being the leader of annual sales in the fast-food industry, the company’s sales growth has slowed down tremendously; net income in 2001 was about $340 million, or 17%, less than it was in 2000 (Peter & Donnelly, Jr, 2010, p.252). This slow sales growth has both internal and external causes, all of which McDonald’s has to contend with and overcome

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