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

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EXCERPTS

TROUBLE ON THE MENU

For several decades, McDonald’s had been synonymous with fast food, but after 2010, customers started looking at it differently. People started showing an interest in outlets serving food which they perceived to be wholesome and made of healthy ingredients, while McDonald’s become synonymous with cheap and greasy food made of unhealthy ingredients. According to Mike Donahue, former chief communications officer at McDonald’s US, “McDonald’s) has become the symbolic scapegoat for anyone wanting to use a generic word to describe obesity or health problems. Anyone that wants to be a critic for food or health issues, their mind SpellCheck inserts McDonald’s, and that’s a major problem if you want to bring in more customers...

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INTERNATIONAL MARKETS

In several international markets where McDonald’s had a presence, it was slowing down too. In the third quarter of 2014, the global same store sales dropped by 3.3%. International operations were affected by challenges in several markets in Europe, Latin America and Asia...

THE TURNAROUND PLAN

In March 2015, Easterbrook, who had been the chief brand officer, assumed the role of CEO. Easterbrook who had worked with McDonald’s since 1993, was instrumental in turning around the company’s UK business...

WHAT NEXT?

The heavily franchised business model put forth by Easterbrook was expected to generate more stable revenue and cash flow streams. The structural changes and ownership were expected to result in savings in the bottom line and spur future growth. McDonald’s planned to deliver US$ 300 million in savings in general and administrative expenses through restructuring, refranchising, and focus on spending...

EXHIBITS

Exhibit I: McDonald’s - Quarterly sales

Exhibit II: McDonald’s Revenues – Region Wise

Exhibit III: McDonald’s -Comparable Sales and Guest Counts

Exhibit IV: McDonald’s - Consolidated Statement of Income

Exhibit V: McDonald’s Turnaround Framework

Exhibit VI: McDonald’s – Reporting Segments