1. Based on Case Study 28 McDonalds (pg. C218) and posted in Modules in Canvas.

2. Instructions Using the information provided in the McDonalds case study as background information to get you started, do additional research needed to perform a SWOT analysis of the company identifying the strengths, weaknesses, opportunities and threats before McDonalds at the moment. From this you should also identify the Companys core competencies then explain your logic. Based on the results of your analysis, what strategy might you use to grow the company (give some specific actions)?

3. Language and tone This paper is to be written in an evidence based, formal, academic, language and tone style. This means you need to be precise and exact and objective. Avoid words like they, them, their, he, his, common clich, personal opinion, and be very aware of proper grammar and sentence construction. Never, ever, never use first person I.

On November 3, 2019, the McDonald's board of directors experiences for our customers," former CEO Steve dismissed Steve Easterbrook over violations of company Easterbrook said in a statement. 2 policy regarding a relationship with an employee and McDonald's has been trying to attract more customers named Chris Kempczinski the new CEO. Kempczinski had to its restaurants by offering more customized products that experience at Kraft Foods and PepsiCo prior to joining are also healthier. It has removed high fructose corn syrup McDonald's in 2015, most recently as president of the USA from its buns, changed from the use of liquid margarine to chain, announced it will acquire artificial-intelligence Andres, former president of McDonald's USA explained startup Dynamic Yield, a company focused on personaliza- why the firm has decided to make these changes: "Why take tion and decision logic technology. Access to this technol- a position to defend them if consumers are saying they drive-through menus based on factors such as time of day, These changes are expected to address some of chalweather, and trending menu items. McDonald's plans to lenges that McDonald's has been facing in many markets, roll out the updated drive-through menus across the United including in the United States, where it has almost 15,000 States during the year. "With this acquisition, we're expand- of its 38,000 mostly franchised restaurants. It has lost a lot ing both our ability to increase the role technology and data of ground with consumers, especially millennials, who are ing both our ability to increase the role technology and data of ground with consumers, especially millennials, who are will play in our future and the spced with which we'll able defecting to traditional competitors like Burger King and to implement our vision of creating more personalized Wendy's as well as to new designer burger outlets such as Five Guys and Shake Shack. Changing tastes are also responsible for the loss of customers that are lining up at fastcasual chains such as Chipotle Mexican Grill and Panera Bread, which offer customized ordering and fresh ingredients (see Exhibits 1 to 4). Source: Annual Report of McDonald's Corporation, 2018. Souress: Annual Report. McDonald's Corporation, 2018; Annual Report. MeDonald's Corporation, 2019. Souro: Annual Report of McDonali's Corporation. 2018. EXHIBIT 4 U.S. Customer Satiafaction Index for Selacted Chains Soure: American Customer Satisfiction Irder (ACSI) EXHIBIT 5 McDonald's Milestones 1948 Brothers Richard and Maurice McDonald open the first restaurant in San Eernadino, California, that sells hamburgers, fries, and milkshakes. 1955 Ray A. Kroc, 52, opens his first MeDonald's in Des Plaires, Illinois. Kroc, a distributor of milkshake mixers, figures he can sell a bundle of them if he tranchises the McDonald's business and install his mixers in the new stores. 1961 Six years later, Kroc buys out the McDonald brothers for $2.7 milion. 1983 Ponald McDonald makes his debut as corporate spokesclown using future NBC-TV weatherman Willard Scot., During the year, the company also sells its 1 villionth burger. 1955 McDonald's stock gces public at $22.50 a share. It will split 12 limes in the next 35 years. 1967 The first McDonald's resteursnt outside the U.S, opens in Richmond, British Columbla. Today there are 31,108 McDonald's in 118 countries. 1968 The Big Mac, the first extension of McDenald's basic, burger, makes its debut and is an immediate hit. 1972 McDonald's switches to the frozen variety for ins successful French tries. 1974 Fred L. Turner succeeds Kroc as CEO. In the mides of a recession, the minimum wage rises to $2 per hour, a big cost increase for McDonald's, which is built around a model of young, low-wage workers. 1975 The first drive - through window is epened in Sierra Vista, Arizona. 1979 McDonald's responds to the needs of working wonen by introducing Happy Meals. A burger, seme fries, a soda, and a toy give warking moms a brealc. 1987 Michael R. Quinlan becomes chief executhv. 1991 Alesponding io the public's desire for healthier foods, McConald's introduces the law-fat McLean Deluxe burger, It fops and is whidrawn from the market. Over the next few years, the choin will stumble several times tryeng to spruce ap its menu. 1992 The company sells its 90 billionth burger, and stogs counting. Taco Bell. The mowe, which prefigures similar price wars in 2002, is wiecely censiderod of follure. 1998 Jack M. Greenberg becomns MeDonald's fourth chlef executlve. A 16 year company weteran, he wows to spruce up the restaurants and their menu. 1999 For the first time, sales from international operations outstrip domestic revenues. in search of eher concepts, the comcany acquires Arome Cafe, Chipotie, Donatos, and. leter, Boston Market. 2000 McDonald's sales in the U.S. peak at an awerage of $1.6 millicn annually per resaiurant. It is, howaver, still mere than at any other fastfood chain. 2001 Subway surpasses McDonald's as the fastiood chain with the most U.S. outiets. At the end of the year it had 13,247 stores, 148 more than McDonald's. 2002 MeDonald's posts its firsteever quarterly loss, of $343.8 million. The stock drops to around $13.50, down 40% from flue years ego. 2003 James R. Cantalupo returns to McDenale's in Jenuary as CEO. He immediately pulls back trom the company's 10-15\% forecas! for per-share earnings growth. 2004 Charles H. Bell takes over the firm after the sudden death of Cantalupo. He siates he will continue with the strategies that have been developed by his aredecessor. 2005 Jim Skinner takes over as CEO after Bell anncunces retirement for health reasons. 2006 McDonald's launches specialty bererages, including colfee-based drinics. 2008 McDonald's plans to add McCafs to euch of its outlets. 2012 Don Thompson susceeds Slkinner as CEO of the chain 2015 Thompson resins because of decining performance and is replaced by Steve Eastebrook, the firm's chief branding officer. 2016 McDonald's opens restaurant in tha 120 th country; the first McDonald's restaurant opens in isstana, Kazakhstan, 00 March a, 2016. 2017 Global MeDelivery Doy is celebrated on July 26 to support the glabal launch of McDellvery with UaerEaTS. 2019 Steve Easterbrook is replaced due to poor jungement in a personel relationslip wilh an empioyee and Chris Kempainstd, president of the USA business unit is named CED. Cantalupo realized that McDonald's often tended to new salad offerings. McDonald's has carricd out extensive miss the mark on delivering the critical aspects of consis- experiments and tests with these, deciding to use higher qualtent, fast, and friendly service and an all-around enjoyable ity ingredients, from a variety of lettuces and tasty cherry toexperience for the whole family. He understood that its matoes to sharper cheeses and better culs of meat. It offerexi franchisees and employees alike needed to be inspired as a choice of Newman's OwR dressings, a well-known higherwell as retrained on their role in putting the smile back into end brand. "Salads have changed the way people think of our McDonald's experience. When Cantalupo and his team brand," said Wade Thoma, vice president for menu developlaid out their turnaround plan in 2003, they stressed upon ment in the U.S. "It tells people that we are very serious getting the basics of service and quality right, in purt by re. about offering things people feel comfortable eating. 76 the foundation. I's fruitless to add growth if the foundation It announced in 2011 that it would reduce the amount of is weak," said Cantalupo. 5 In his effort to focus on its core business, Cantalupo sold accompanied the apple slices in these meats. The addition off the non-burger chains that the firm had recently ac-. of fruits and vegetables has raised the firm's operating quired. He also cut back on the opening of new outlets, for costs, because these are more expensive to ship and store cusing instead on generating more sales from its cxisting because of their more perishable nature. "We are doing outlets. Cantalupo pushed McDonald's to try to draw more what we can," said Danya Proud, a spokesperson for the customers through the introduction of new products. The firm. "We have to evolve with the times."? chain had a positive response to its increased emphasis on The rollout of new beverages, highlighted by new coffeehealthier foods, led by a revamped line of fancier salads. The based drinks, represented the chain's biggest menu expanrevamped menu was promoted through a new world-wide ad sion in almost three decades. Under a plan to add a MeCafe slogan "I'm lowing it," which was delivered by pop idol Justin section to all of its nearly 14,000 U.S. outlets, MeDonald's TimberlakethroughasetofMTVstylecommercials.andfruit-basedsmoothiestoitscustomers."Inmanycases,hasbeenofferinglattes,cappuecinos,ice-blendedfrappes, StrivingforaHealthierImageWhenJinsSkinnertookoverfromCantalupoin2004,hewhowasresponsiblefortherollout.andfruit-basedsmoothiestoitscustomers."Inmanycases,werecomingforthemeal,"saidLeeRenz,beforethey When Jima Skinner took over from Cantalupo in 2004, he Skntinued to push for MeDonald's to change its image. Skinner felt that one of his top priorities was to deal with the growing concerns about the unhealthy image of Refurbishing the Outlets McDonald's, given the rise of obesity in the United States. As part of its turnaround strategy, McDonald's also been These concerns were highlighted in the popular documen- selling off the outlets that it owned. More than 80 percent vividly displayed the health risks that were posed by a affiliates. Skinner began working with the frunchisoes to at steady diet of food from the fast food chain. With a rise in dress the look and foel of manny of the chuin's aging stores. awarencss of the high fat content of most of the products Without any changes to their decor, the firm was likely to offered by McDonald's, the firm was also beginning to face be left behind by other savvier fast food and drink retailers. lawsuits from some of its loyal customers. The firm is in the midst of pushing harder to refurbish-or In response to the growing health concerns, one of the re-image-all of its vutlets around the world. "People eat first steps taken by McDonald's was to phase out supersiz- with their eyes first," said Thompson, "If you have a restauing by the end of 2004. The supersizing option allowed cus- rant that is appealing, conternporary, and relevant both drinkbypayingalittleextra.McDonaldsalsoannoancedThere-imagingconceptwasfirsttriedinFrancein1996 ulut it intended to start providing nutrition information on by Dennis Hennequin, an executive in charge of the chain's the packaging of its products. The information was easy to European operations, who felt that the effort was exsential read and would tell customers about the calories, fat, pro- to revive the firm's sagging sales. "We were hip 15 years ago, Finally, MeDonald's also began to remove the artery- plying the re-imaging concept to its outlets around the world, Finally, McDonald's also began to remove the artery- plying the re-imaging concept to its outlets around the world, clogging trans fatty actas from the oil that it used to make with a budget of more than half of its total annual capital its French fries and subsequently announeed plans to re- expenditures. In the United States, the changes cost as much duce the sodium content in all of its products by 15 percent. Sas $650,000 per restaurant, a cost that is shared with the But Skinner was also trying to push out more offerings franchisees when the outlet is not company orned. that are likely to he perceived by customers to be healthier. One of the prototype interiors that was tested out by MeDonald's has continued to build upon lts chicken McDonald's has curved counters with surfaces painted offerings using white meat with products such as Chicken in bright colors. In one corner, a touch-activated screen Selects. It has also placed a great deal of emphasis upon its allows customers to punch in orders without queuing. The interiors can feature armehairs and sofas, modern sandwich types. McDonald's is hoping that such a push tolighting large television screens, and even wireless Internet ward more customization would bring more customers into access. The firm is also trying to develop new features for their outlets, bringing the U.S. counter/drive-through its drive-through customers, which account for 65 percent customer ratio closer to 50/50, up from the current 30/70. of all transactions in the United States. They inciude music MeDonald's has also been working to simplify its menu, aimed at queuing vehicles and a wall of windows on the reducing the number of "value meal" promotions, groups of drive-through side of the restaurant allowing castomers to items that together cost less than ordering items individually. see meals being prepared from their cars. It has tweaked its "dollar menu" replacing it with "dollar vilue outlets next to the usual fast food counter. The McCaf con- get each customer to spend more. But McDonald's had introcept originated in Australia in 1993 and has been rolled out dueed these bargain menus because its prioes had risen over in many restaurants around the world. McDonald's has the years, driving away customers to cheaper outlets. Consathe refurbishment of its outlets. In fact, part of the refur- coning from its "dollar menu" where everything cost a dollar. bishment has focused on the installation of a specialty bev- Over the past year, MeDonald's saw a slight jump in erage platform across all U.S. outlets. The cost of installing U.S. sales after launching an allday breakfast at most of its this equipment is running at about $100,000 per outlet, locations. The frunchises had to be convinced to invest withMcDonaldssubsidizingpartofthisexpensc.ThefirmhasplannedforallMeCafestoofferespresso-about$5,000toaddfoodpreparationspaceinordertoofferbreakfastalongwiththeregularlunchordinneritems. based coffee, gourmet coffee blends, fresh baked muffins, However, sales from the all-dey breakfast have begun to flatand highend desserts. Customers will be able to consume ten out, with a gradual decline in sales from customers who these while they relax in soft leather chairs listening to jazz, were coming in throughout the day to order breakfast. big band, or blues music. Commenting on this significant expansion of offerings, Marty Brochstein, exccutive editor of The Licensing Lefter said: "McDonald"s wants to be seen More Gold in These Arches? as a lifestyle brand, not just a pluce to go to have a burger."11 In spite of all the changes that have boen made by Eastersome locations that allows customers to skip the counter state-owned conglomerate and the Carlyic Group, a private erything about their burger, from the type of bun to the va- growth opportunity for McDonald's," Easterbrook suid in a riety of cheese to the many, glossy toppings and sauces that recent news release. "The new partnership will combine can go on it. The firm has plans to gradually expand the one of the world's most ponerful brands and our anparalconcept to more locations, but franchises are concerned leled quality standards with pariners who have an un- ghout the costs, which can run up to $125,000 per restau- matched understanding of the local markets." rant to make the required changes. "Customization is not McDonald's has also been trying to grow by reaching was hoping to attract more younger customers who may be and fat-free muffins. It attracts working adults for lunch, moving away from frozen processed food that is loaded with particulariy those who are squeezed for time, with its burs preservatives. But it realized that there were considerable ers and fries. And its introduction of wraps has drawin in risks involved with making such a change. The burgers teenagers late in the eseaing after they have been partying. would be priced higher at $5.49, could take seven minutes to Restaurant analyst Bryan Elliott commented; "They've prepare, and could only be ordered from inside the store and Iried to be all things to all people who walk in their door," eventually brought to your table. Franchises complained that Above all, MeDonald's is concerned about the findings this could not be offered to drive-through customers that of a recent survey that showed only 20 percent of millennimake up about 70 percent of the chain's business. als had even tried a Big Mac. It is also aware that despile Furthermore, such a change ran counter to the image for its efforts to diversify its menu, 30 percent of sules come inexpensive and fast food thut McDonald's has worked hard from just five items: Big Macs, hamburgers, cheeseburgers, to build over the years. Easterbrook has subsequently shifted MeNuggets, and fries. It has mannged to increase traffic ture Crafted Recipes" that would allow both in-store and recent announcement that they would offer a more limited drive-through customers to choose a bun and one of four sample of their full menu between midnight and 5 am. Above all, the expansion of the menu beyond the staple of burgers and fries does raise some fundamental questions. Most significantly, it is not clear just how far McDonald's can stretch its brand while keeping all of its outlets under the traditional symbol of its golden arches. In fact, industry experts believe that the long-term success of the firm may well depend on its ability to compete with rival burger chains. "The burger category has great strength," added David C. Novak, chairman and CEO of Yum! Brands, parent of KFC and Taco Bell. "That's America's food. People love hamburgers." 15