McDonald’s Strategy, Case Study Example

McDonald’s has over 31.000 franchises over the world. It is also responsible for the wages and well-being of more than 1.5 million employees. (Upeon, 2005, p. 3.) While the company is present in the marketing world on a constant basis, health organizations regularly target the brand claiming that their food promotes unhealthy eating habits. The case study would be examining the responses given to these claims and the corporate strategy of McDonald’s to deal with negative press. The analysis of the leadership style of James Alan Skinner who took over the post of the CEO in 2004 and operational changes leading to the worldwide presence of the brand. Stakeholder analysis of McDonald’s is necessary, in particular the fact that it targets younger generations.

Major challenges of leadership in the 21^st Century are offering healthy alternatives in menus, corporate social responsibility campaigns and quality assurance of customers. Today, McDonald’s is dealing with NGO and government criticism by publishing nutritional values of their food online. According to Emerald Management First (Botterrill and Kline, 2007, p. 2.), the re-branding of the company to create a healthier and more responsible image was necessary in order to deal with the “fat kids and burger panic” in 1985. Fast food chains were targeted as the main contributors of fattening foods in children’s diet. In a statement, the American Medical Association labeled hamburger as “the leading source of saturated fat in the American diet” (Botterrill and Kline 2007, p. 2.) After the above publications appeared in popular American newspapers, the company had to deal with potential loss of reputation and business. A decision had to be made to create healthier menus and transform the business image through re-branding. Bargaining power is a competitive advantage that would help the company move forward in the 21^st Century. This would include the extension of supplier markets to local farms, participating in even more community projects and initiatives to engage all stakeholders, including suppliers in social responsibility campaigns. Further, strengthening corporate social responsibility, using local organic and ethical farms for supplying fresh produce for the company, creating campaigns about McDonald’s new approach towards nutrition was necessary.

Based on a detailed SWOT analysis created (Appendix 1), the paper would suggest potential strategies that would enhance the positive image of the brand, increase brand loyalty and identify new target groups within the fast food industry. Further, the threat of global competition will also be analyzed, in order to determine how can McDonald’s offer healthy choices substituting Starbucks, Subway and fresh sandwich food chains’ products. The new “health and lifestyle” campaign launched by the company would be analyzed based on research data in order to determine whether or not it is effectively dealing with negative press and loss of company reputation. Reviewing and improving the menu range further while monitoring the competition would provide McDonald’s with a competitive advantage. However, the challenge is greater than it first looks, according to Botterrill and Kline (2007, p. 4.). The authors state that parents’ mistrust and worries “are not likely to dissolve in a flurry of lifestyle advertising”.

References

Upton, D. (2005) McDonald’s Corporation (Abridged) Harvard Business School.

The CNN Money 500 Website. (2011) Why McDonald’s wins in any economy. http://money.cnn.com/magazines/fortune/fortune500/2013/snapshots/2262.html

Botterill, J., Kline, S. (2007) Re-branding: the McDonald’s strategy. Shortened version of: McLibel to McLettuce: childhood, spin and re-branding. Society and Business Review, Volume 2 Number 1 2007 Emerald Management First.