1. In your opinion, what is the future of fast food around the world? Are consumer taste changes and concerns about healthy eating likely to diminish the demand for fast food?

2. How would you evaluate McDonald’s reinvention strategy? Do the changes represent a fundamental shift in the company’s competitive model, or are they cosmetic?

3. If McDonald’s hired you to advise it with regard to future trends and the changes it should consider, what would you suggest? Defend your suggestions.

4. Research the current state of McDonald’s, particularly in light of the retirement in March 2015 of CEO Don Thompson. How has reinvention been difficult for the company? How might a reinvention strategy sometimes seem to the general public?

McDonald’s (Oak Brook, IL) has never been content to sit back and wait for consumer tastes to change. Rather, the company continually tries to shape the face of fast food and influence the marketplace with new offerings and other image changes. In the face of stiff competition from healthier alternatives, such as Subway (Subway Corporation, Milford, CT) and a general feeling by the public that major fast-food companies are not much different from one another in terms of their prices, quality, service levels, and product offerings, McDonald’s has had to reinvent itself.

When fast food seemed synonymous with “greasy,” “over-cooked,” and “fried,” McDonald’s met the challenge by adding healthy menu options, such as wraps, grilled chicken, fresh fruit, and yogurt-based smoothies. These menu changes were doubly effective: They allowed McDonald’s to compete directly with other stores that promoted healthy alternatives, and they diffused the arguments of their harshest critics, including the San Francisco Board of Supervisors, who, in 2011, banned McDonald’s inclusion of a toy in their Happy Meals, claiming that the “pester power” of children could induce parents to buy these unhealthy lunch choices. McDonald’s responded by offering healthy options such as milk and apple slices in Happy Meals, and instead of eliminating the toys, McDonald’s charged ten cents for the addition of a toy, with the proceeds benefitting the charity the Ronald McDonald House.

McDonald’s efforts in staying current in a changing industry are based on managing demand, forecasting trends, determining what the customer wants, and where possible, influencing their perceptions. Thus, McDonald’s must address both sides of the supply chain. It does so by forecasting demand for its products based on reappraising taste and current trends, and working with suppliers to provide menu items that are of consistently high quality and available.

McDonald’s continues to be the leader in the fast-food industry. When competitors offer their own healthy menus, they are often seen as simply copying and therefore acknowledging McDonalds’ prescience in staying ahead of the consumer trend curve. Critics have charged that the fast-food industry offers poor choices to patrons who don’t know any better. Unlike some competitors who seem content to keep their menus unchanged and their products unhealthy, McDonald’s has been doing what is necessary to change who it is, reinvent itself, and keep its fingers firmly on the pulse of its international customer base.