Case Study 1
McDonald’s: The Challenge to Sustain
BUS590: Business Strategy
Professor Catherine M. Dolan Garcia, PhD
January 10, 2016
McDONALD’S: THE CHALLEGE TO SUSTAIN
The brand McDonald’s is perhaps already synonymous to what most refer to as “fast food” in as much as Colgate is to toothpaste or Coke is to soda or soft drinks. For so many years, top of mind is McDonald’s when it comes to quick meals, service, affordable cost and of course, hamburgers. The growth and dominance of McDonald’s is admired and emulated by many in the food, business, operational, marketing and even philanthropic arenas but it’s success is not without undercooked patties, hot coffees and apple pies that burn, stinky toilets and fattening food menu. Regardless, however, McDonald’s has remained on top of the food chain (the fast food chain that is) through the various strategic adjustments it has implemented over recent years towards its challenge of sustaining its supremacy over rest of the field amidst today’s aggressive players, modern technology and smarter people, both providers and users. This paper presents what McDonald’s has and continues to implement to maintain its stronghold in the industry.
McHistory and McBackground
What started as a carhop drive-in barbeque restaurant 76 years ago transformed into a mega company with close to 36,000 stores in more than 100 countries worldwide. The company’s founder, Ray Kroc steered the company into becoming the undisputed global leader in fast food chains with the franchise-based model that he had perfected. Consumers loved the idea of the less than10 items in the menu, fast service and tasty hamburgers while businessmen enjoyed the gains resulting from the franchising model. This trend eventually led to about 100 restaurants in 1959 and to a thousand chains by 1968 with presence in every US State by 1970.
McProblems
Cliché as it sounds, fame comes with a price. McDonald’s wasn’t immune to problems....