Mcdonald 's : Losing Market Share Essay

Mcdonald 's : Losing Market Share Essay

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In 2002 McDonald 's was losing market share. Employee and franchisee morale were extremely low. The popular view was that the time for McDonald 's had passed. Shares were in severe decline.

Then the company 's chief executive officer, Jim Cantalupo, and president at the time, Charlie Bell, instituted a turnaround that took less than a year to show results. I was at McDonald 's and participated in designing and executing the turnaround plan. The momentum carried the brand until the effects of misguided decisions in recent years put McDonald 's into another downward spiral.

On Monday, the company announced that in January its global sales in restaurants open at least 13 months fell 1.8% -- that 's a serious decline in the fast-food industry. Recently, McDonald 's reported a 21% drop in fourth-quarter earnings and announced that CEO Don Thompson would retire at the end of the month.

Another fast turnaround of the McDonald 's brand is possible -- and it is essential for the company 's future. If you don 't take care of the short term, there will be no long term. Here are a few immediate actions that would reignite McDonald 's.

Stop the hemorrhaging: Plugging the holes in the bottom of the brand bucket must be the first priority. Going after new customers -- as McDonald 's has lately been doing in trying to attract millennials by offering more customization of its food -- without focusing on customer retention won 't succeed. It costs much more to attract a new customer than it does to keep a customer loyal. Love the customers you have.

Focus on the direct competition: Why are Burger King, Chick-fil-A, In-and-Out Burger, Popeye 's, Subway, Wendy 'sand others doing well while McDonald 's struggles? In the short term, the compa...

... middle of paper ...

...on with Oprah Winfrey 's trainer; the "Open Doors" program in France, with teachers, parents and children invited to the restaurants to see how the food is prepared; and a relationship with Food Group Australia, accredited dietitians who helped develop a healthier-food program Down Under.

The McDonald 's trust bank needs trust deposits. Yet it doesn 't help much to have transparency for food that customers don 't want to eat. Sometimes the more you know the worse it makes you feel: 19 ingredients in McDonald 's fries! These include sodium acid pyrophosphate, hydrogenated soybean oil with tertiary butylhydroquinone (TBHQ) and the delightful dimethylpolysiloxane added as an antifoaming agent.

In 2002 commentators said that McDonald 's was dying. They were wrong. The company became one of the best-performing U.S. businesses for nearly a decade. It can happen again.

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