McDonalds in the United Kingdom

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Case Details:

Case Code : BSTR339
Case Length : 32 Pages
Period : 1974-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : McDonald's Corporation
Industry : Fast food
Countries : UK

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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

Background Note

The origins of McDonald's date back to the 1930s, when two brothers Richard "Dick" J. McDonald and Maurice "Mac" McDonald opened a restaurant called Airdrome in Arcadia, California, that sold hot dogs, tea, and coffee...

Mcdonald's Enters UK

In the early 1970s, the UK was the only market left untapped by McDonald's in Western Europe. The reasons for the company's late entry into the country were high real-estate costs and the prices of raw materials such as beef. Besides, the unpopularity of drive-in restaurants, which were relatively unknown in Britain till the 1970s, delayed McDonald's entry into the UK...

The Downhill Journey

In the mid-1980s, members of the London Greenpeace started a campaign against the business practices of McDonald's. In 1985, they launched an "International Day of Action against McDonald's" which was held on October 16 every year after then. In 1986, the activist group came out with a six-page pamphlet called "What's Wrong with McDonald's?-Everything they don't want you to know."...

The "Plan to Win" Strategy

In 2003, McDonald's introduced the "Plan to Win" strategy globally after it reported its first quarterly loss as a public company. The loss amounted to US$ 344 million. The strategy was a business concept developed by McDonald's in order to attract more customers, increase brand loyalty, and become more profitable as a business...

Back to Basics

Easterbrook , who replaced Beresford as McDonald's CEO in 2005, expressed his desire to get McDonald's back to the basics - which was to serve burgers not salads. According to him, healthier menus accounted for less than 10% of the chain's sales and that he saw no reason to continue with them...

Operational Strategy

McDonald's business in the UK was driven by five factors which were a part of its "Plan to Win" strategy. The first one was being able to provide value for money by offering food at lower prices to customers...

Localization

With its entry into the UK, McDonald's introduced American style fast food which was quite different from the English taste. For instance, for making French fries, McDonald's used imported russet potatoes. The milk shakes available at McDonald's were very thick and different from the ones available at local fast food chains...

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