McDonald's: No Longer the Great American Meal
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Case Details:
Case Code : BSTR044
Case Length : 17 Pages
Period : 1965
Organization : McDonalds
Pub Date : 2003
Teaching Note :Not Available
Countries : USA
Industry : Food Retailing
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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EXCERPTS
Enter Cantalupo
In December 2002, the board decided to oust CEO Greenberg during whose tenure McDonald's launched 40 new menu items but could not make even one of them succeed. McDonald's decided to bring back retired vice chairman, Cantalupo, the man behind McDonald's' successful international expansion in the 1980s and 1990s.
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The board's decision to bring Cantalupo back was based on the belief that McDonald's need someone who knew the company well. Analysts felt that Cantalupo's challenges were to get the basics of service and quality right, reconstitute a tough "up or out" grading system that would weed out underperforming franchisees. (Refer Exhibit VII for challenges before Cantalupo). Cantalupo slashed the near-future-sales-growth estimates to only 2% down from 15%. He admitted that achieving 10% to 15% growth rate was an unrealistic task. He also announced that the company would add only 250 new outlets in the US, which was 40% lesser that the figure quoted in 2002. In Europe, McDonald's planned to add only 200 outlets, 30% lesser than it did in 2002...
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Exhibits
Exhibit I: Share Price Movement
Exhibit II: Quarterly Results
Exhibit III: History of McDONALD's
Exhibit IV: A Note on the Fast Food Industry
Exhibit V: History of Burger King
Exhibit VI: Franchising Model
Exhibit VII: Challenges Before Cantalupo
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