Mcdonalds

Danielle Lundberg
August 23, 2008
Case Study #1

McDonald’s Corporation: Regilding the Golden Arches

McDonald 's Corporation is the world 's leading food service organization because customers come to McDonald 's for their signature products and service. Today, customers are more health conscious and have an increase in the amount of healthy options that are available. Some of the main issues in this case study were the amount of CEO turnover in the beginning, changing the negative perception from customers, and redirecting the focus toward a new target market by changing their strategy from expansion to customer satisfaction.

Morgan Spurlock changed the public’s image of McDonald’s with this documentary film called “Supersize Me”. Morgan Spurlock filmed himself to demonstrate the health effects of McDonald’s food. Spurlock completed this by eating McDonalds three times a day, for a 30-day period while keeping record of how this affected his health. A critical issue in the case is after Spurlock’s film was released in 2002, McDonald’s had a bad public image and needed to fix the damage that was done after Spurlock’s documentary. Jim Cantalupo was given credit for thinking of the “turnaround strategy” where he wanted to introduce healthier foods to the menu (O 'Rourke IV 93). The “turnaround strategy” was Spurlock’s recovery plan to fight back against the “Supersize Me” video. Cantalupo wanted to decrease the amount of new stores and switch to “grassroots marketing efforts” instead of relying on the national and co-op advertising (O 'Rourke IV 95). McDonald’s had over saturated the market with a large increase in the amount of stores and was losing business from their existing locations.

Another main issue is the unusual amount of turnovers that took place during the timeline from 2002 through 2006. Jim Cantalupo was the main creator of the “turnaround strategy” and stated the he wanted to “switch from a strategy of expansion to a strategy of quality, service, and new products” (O 'Rourke IV 92). Cantalupo’s marketing campaign was exactly what McDonald’s needed to change their image. Jim Cantalupo passed away in 2004 and Charlie Bell was appointed and then shortly after was diagnosed with colorectal cancer and quit to fight his sickness. This was a surprise to McDonald’s and did not help the process of the “turnaround strategy.” Cantalupo had the original idea to change the direction of the company and start focusing on “I’m Lovin it” and the “Go Active” happy meals. Two consecutive CEO’s attempted to carry out Cantalupo’s plan and both did not live to see the end. Situations like this make it difficult to successfully execute the “turnaround strategy” or any strategy because there needs to be one person that is the brains of the operation and that person was consistently changing. It is difficult to have a strong successful turnaround when there is rapid turnover.

When McDonald’s decided to change their image they also wanted to redirect the focus of their target market. In the past McDonald’s target market was focused on children and young adults. The “Go Active” happy meal was created in 2004 as a way to target adults by offering healthier options. The “Go Active” happy meal targeted adults because they offer premium salads, and sandwiches at a competitive price. The “Go Active” happy meal relates the message that McDonald 's is responding to customers ' interest in health and fitness (O 'Rourke IV 93).
Stakeholders are an extensive category, which would fundamentally be anyone that has a stake in McDonalds, which would include employees, suppliers, customers, investors, etc. McDonald’s have a lot of stakeholders that are affected by the company’s choices everyday because the company is extremely large.

McDonald 's has saturated the market and is located in over 100 countries around the world. With over thirty thousand locations McDonald’s serves 52 million customers each day (http://www.mcdonalds.com/corp/about.html). The increasing competition of healthy options is forcing businesses to pay much more attention to satisfying customer’s needs for healthier options. In order to achieve profitable organic growth depends on the capability to attract and develop profitable customer relationships. 
Customers are a key stakeholder in this case study because an average of 52 million are affected each day. The decision to alter the menu and change the focus of the target market affects all of the customers. When McDonald’s decided to change the menu, the customers are affected the most because the supply chain was changed. Their choices are no long the same as they have been and their supply at stake. Customers are all different because every customer has different needs or wants and when change occurs some of those customers will have more needs satisfied and other customers will have less needs satisfied.

The employees are also key stakeholders in the case study because of the changes they encounter themselves. The new products that McDonald’s chose to sell require more time and labor to prepare. McDonald’s also wants to improve customer service, increase sales of existing restaurants, and providing more 24 hours locations. The employees will carry out these changes therefore their working conditions are at stake. One of the changes that Cantalupo requested was a more diverse menu with healthier options. McDonald’s advertises fresh salads, but that means that they have to make fresh salads daily to maintain fresh salads all day. Cantalupo also wanted the locations to be more available by having more 24 hours locations. The stores that are chosen to stay open 24 hours a day will affect the managers and staff because they will have to schedule more people and have late night working hours.

The suppliers are also a major stakeholder because they will also have to make changes according to McDonald’s changes. McDonald 's suppliers are intentionally accessible to the each 
restaurant and have access to all of their products. The supplier’s reputation is at stake because if they cannot meet the demand McDonald’s has the power to kind another source. McDonald 's is 
always thinking of ways to use its leverage to increase sales. 
When McDonald’s made the decision to change the menu by adding healthier options the suppliers had to make these changes first. Suppliers play a vital role in the success of a business because they are responsible for providing the right products at the right price. Once the suppliers can supply the goods then McDonald’s can market and sell the new items.

The investors would also be a stakeholder in the case study because they are affected by the growth of the company and the changes that are made. Investors are a stakeholder because they entrust money into the investment of products they believe in with the expectation of a financial gain in the end. The changes that McDonald’s made within the company affected the amount of return the investors received, meaning their money is at stake. Investors want the least amount of risk and the maximum return of their investment.

McDonald’s the famous hamburger chain has been a main target of obesity lawsuits and needed to mend its brand image. The company has increasingly been criticized for advertising unhealthy eating habits for children and adults. McDonald 's over the past year took steps to improve its image by introducing premium salads and sandwiches and eliminating its Super Size menu options. Instead McDonald’s started offering other diet-conscious options at locations. The stakeholders in this case study is a broad spectrum of people including customers, employees, investors and suppliers because they are the individuals affected by these changes.

Works Cited

O 'Rourke IV, James S. The Business Communication Casebook. 2. Mason, OH: Thomson Higher Education, 2007.

http://www.mcdonalds.com/corp/about.html

Cited: O 'Rourke IV, James S. The Business Communication Casebook. 2. Mason, OH: Thomson Higher Education, 2007. http://www.mcdonalds.com/corp/about.html