McDonald\u2019s Corporation.docx - WAC MacDonalds Corporation Synopsis MacDonalds whose golden arches are recognized virtually all over the globe started

McDonald’s Corporation.docx - WAC MacDonalds Corporation...

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WAC MacDonald’s Corporation
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Synopsis: MacDonald’s, whose golden arches are recognized virtually all over the globe started their business in 1940 with just 10 items. They are considered to be the pioneer of quick service industry and by the year 1991 MacDonald’s was daily serving 8% of the American population. The company symbolizes fast service, tasty and inexpensive food. The company enjoyed double digit growth when they had a head start in the fast food industry but by the beginning of the 90”s MacDonald’s was facing various challenges and finding it difficult to perform as they used to. The case elaborates the situation of MacDonald’s in the early 1990’s. After decades of unprecedented growth the company has started to face slowdown in sales growth, increase in competition and changing preferences of consumers. The overall share of MacDonald’s in quick service have dropped down from 18.7% to 16.6% which is an alarming situation for the corporation. The demographics of the American population was shifting towards health and environment conscious consumers. MacDonald’s is considered to be the epitome of “junk food” and the company is striving hard to incorporate changing trend of the customers. The competitive environment of the market have also evolved from traditional competitors like pizza hut, KFC and burger king to competitors targeting different niche segments of the market. The development of competitors specializing in few dimensions of the quick service industry have eroded sales of MacDonald’s. The overall scenario of the fast food business in America have persuaded MacDonald’s to explore various opportunities that they could capture and somehow mitigate their risk. There is a lot of potential in the overseas market but 60% of their profit was accounted from their US sales. Page 1 of 6
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MacDonald’s Recipe for Success: Ray Kroc’s approach to the business was quite different from what was practiced by other players in the market. While competitors focused on recruiting franchisees and lowest cost suppliers, Ray Kroc completely ignored them. He was much more concerned about making MacDonald’s quality consistently
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  • Fall '17
  • Krejewski
  • McDonalds Corp, Operations

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