Speech on McDonald’s
You are a student of marketing and economics at Stanford University in California. You have been asked to give a speech on McDonald’s to your fellow students at the university. In the speech, you analyse the company’s current problems and discuss if its turnaround strategy will solve the problems.
You may use additional sources in English, for example from the Internet. Do not forget to document your sources.
With more than 35,800 global stores, McDonald’s is still the world’s largest fast-food chain. It just might not be the most relevant where consumer tastes are concerned— and newly released data indicate that the problem isn’t going away.
The burger chain reported this morning, Dec. 8, that same-store sales in November fell 4.6 percent in the U.S.—the biggest drop in more than a decade—and 2.2 percent globally. McDonald’s same-store sales in the U.S. haven’t been positive since they rose 0.2 percent in October 2013.
McDonald’s said in July that it would be taking 18 months to reposition itself as
an inexpensive and desirable place to eat. The company is continuing to modernize its image through store renovations, mobile apps, and technology upgrades (such as
Apple Pay) to become “a true leader in the digital space,” as spokeswoman Becca Hary put it in an e-mail. In some markets, McDonald’s is also testing table service, localized versions of menu items, and customized burgers.
These improvements are part of what McDonald’s is calling the “Experience of the
Future”—and the future is just around the corner. The chain will implement these changes through 2015, so by the end of next year we should have a clearer picture of whether the company’s sales slump will drag on.
McDonald’s thinks adding customizable options for burgers will help the business.
McDonald’s US business is continuing to slide.
The fast food chain is struggling with declining sales, fast-casual competitors, and unrest from workers and franchisees. This week, the company announced US sales fell 3.3% last quarter.
McDonald’s CEO Don Thompson said the brand has a strong turnaround plan in place.
“I am confident in our ability to regain momentum in the US given the actions that we’re taking and the pace at which we’re moving,” Thompson told investors earlier this week.
He outlined the brand’s strategy for saving its US business.
Make menus more local.
McDonald’s is working to tailor menu items and promotions for different regional markets.
Thompson says that in many cases, franchisees will have the power to decide which items and promotions they offer in restaurants.
Offering a more tailored menu could help bring in new customers who appreciate that McDonald’s is catering to their tastes. It could also help ease tensions from franchisees who say that the company’s constant new menu items are creating
financial and operational challenges.
Get rid of some menu items.
McDonald’s is planning on getting rid of some menu items in January.
The current menu, which has grown 70% since 2007, has been cited as the reason for long wait times and declining customer service.
Paring down the menu will “better highlight customers’ favorites and make the experience faster and easier for our customers and our crew,” Thompson said. Having fewer menu items could also lead to a better work environment and higher employee retention.
Add personalization options.
Consumers have been eager to personalize their food, as evidenced by the popularity of fast-casual chains like Five Guys and Chipotle.
McDonald’s has been testing a concept that lets customers use tablets to build their own burgers with toppings like guacamole, bacon, or jalapenos.
The brand is also offering consumers the option to upgrade their breakfast sandwiches with egg whites or white cheddar.
McDonald’s is fighting back against accusations that its food is unhealthy and overly processed.
The company recently released a video starring former “MythBusters” cohost Grant 40 Imahara. He tours a meat factory in California that produces beef patties.
“Conveying the facts and adjusting misperceptions about the freshness, quality and integrity of our ingredients appeals to our customers and supports the work we’re doing to offer greater menu choice,” Thompson said.
The slumping fast-food giant unveiled a new, “love”-focused ad campaign
Following a year of slumping sales, McDonald’s is banking on the power of love to spur a turnaround.
On Friday, the fast-food mega-chain unveiled new ads that expand on the company’s decade-old “I’m Lovin’ It” slogan by highlighting the “lovin’” aspect of the campaign.
“This new focus will inspire everything we do moving forward, from advertising and marketing to how we interact with customers in restaurants and on social media,” the company said in announcing what U.S. Chief Marketing Officer Deborah Wahl calls “a brand transformation.”
The revamped marketing push follows a tough year for McDonald’s MCD during which it reported declining revenue. To reverse the slide, the company has slimmed- down what many customers said was a confusing menu while adding healthier and fresher food.
New television and online ads will begin appearing over the weekend, McDonald’s said. One new spot the company posted online features a collection of odd couples
— from a knight and a dragon to the Road Runner and Wile E. Coyote — coming together in harmony as they share a McDonald’s meal.
“Lately, the balance of lovin’ and hatin’ seems off,” Wahl said in a video posted
online by the company. “Who better to stand up for lovin’ than McDonald’s? Lovin’ 20 sits at the heart of our tagline and it sits at the heart of our business.”
There was no immediate word on how much McDonald’s will spend on the new ad campaign.
In addition, McDonald’s is hoping to build a closer relationship with customers by encouraging them to ask questions about the chain’s food. As an example of the social media campaign, the company listed this question: “What part of the chicken is a Chicken McNugget?” “McDonald’s is moving from a philosophy of billions served to billions heard,” Wahl said in Friday’s video. She also highlighted the company’s recent efforts to scale back the size of its menu while introducing additional healthier dining options, including in its Happy Meals for kids.
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