McDonalds in the United Kingdom


McDonalds in the United Kingdom
Case Code: BSTR339
Case Length: 32 Pages
Period: 1974-2009
Pub Date: 2009
Teaching Note: Not Available
Price: Rs.500
Organization: McDonald's Corporation
Industry: Fast food
Countries: UK
Themes: Entry, Expansion, Localization, Operational Strategy
McDonalds in the United Kingdom
Abstract Case Intro 1 Case Intro 2 Excerpts

Excerpts

Mcdonald's Enters UK

In the early 1970s, the UK was the only market left untapped by McDonald's in Western Europe. The reasons for the company's late entry into the country were high real-estate costs and the prices of raw materials such as beef. Besides, the unpopularity of drive-in restaurants, which were relatively unknown in Britain till the 1970s, delayed McDonald's entry into the UK....

The Downhill Journey

In the mid-1980s, members of the London Greenpeace started a campaign against the business practices of McDonald's. In 1985, they launched an "International Day of Action against McDonald's" which was held on October 16 every year after then. In 1986, the activist group came out with a six-page pamphlet called "What's Wrong with McDonald's?-Everything they don't want you to know."...

The "Plan to Win" Strategy

In 2003, McDonald's introduced the "Plan to Win" strategy globally after it reported its first quarterly loss as a public company. The loss amounted to US$ 344 million. The strategy was a business concept developed by McDonald's in order to attract more customers, increase brand loyalty, and become more profitable as a business...

Back to Basics

Easterbrook , who replaced Beresford as McDonald's CEO in 2005, expressed his desire to get McDonald's back to the basics - which was to serve burgers not salads. According to him, healthier menus accounted for less than 10% of the chain's sales and that he saw no reason to continue with them...

Operational Strategy

McDonald's business in the UK was driven by five factors which were a part of its "Plan to Win" strategy. The first one was being able to provide value for money by offering food at lower prices to customers......

Localization

With its entry into the UK, McDonald's introduced American style fast food which was quite different from the English taste. For instance, for making French fries, McDonald's used imported russet potatoes. The milk shakes available at McDonald's were very thick and different from the ones available at local fast food chains...

Promotional Strategies

McDonald's promoted its brand image in the UK through the use of digital media like the Internet, websites, online promotions, e-mails, online games, and TV commercials. These initiatives were meant to create awareness among customers regarding the quality of the food, nutrition, health-related information, menu choices, etc. at McDonald's......

Employees

As of 2008, McDonald's employed about 72,000 employees across all of its restaurants in the UK. The fast food giant was one of the largest employers of young adults in the UK, with an increasing number of candidates applying to work in hourly positions....

Operational Strategy

McDonald's business in the UK was driven by five factors which were a part of its "Plan to Win" strategy. The first one was being able to provide value for money by offering food at lower prices to customers......

Environmental Policies & Community Involvement

McDonald's restaurants in the UK operated as part of the local community. In order to protect the local environment in which it operated, the company implemented ethical practices across its business. Litter bins were found outside all McDonald's restaurants....

Results

In 2007, sales in the UK were up by 4.6% and McDonald's was slowly gaining market share in the country. In 2007, its sales in Europe witnessed an upward curve, growing by 3.9% in February, 4.1% in both May and June, 4.3% in July, 4.9% in August, 5.3% in September, 5.4% in October, and 5.6% in November.....

Challenges

Despite delivering satisfactory performance in the UK in 2009, experts felt that McDonald's had some tough challenges ahead in that market. Over the years, the company was accused of making products with high fat content and it was held responsible for the growing problem of obesity in the UK.....

Outlook

Despite the economic downturn, McDonald's business continued to grow in the UK. Industry experts opined that though McDonald's was not recession proof, it was not affected by the economic downturn as its sales and customer visits continued to grow in the UK...

Exhibits

Exhibit I: Growth of McDonald's Corporation
Exhibit II: McDonald's International Expansion
Exhibit III: Revenues of McDonald's Corporation
Exhibit IV: Fast Food Industry in UK
Exhibit V: McDonald's UK Menu

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