Marketing Management, Case Study. Please answer in 30mins. Thanks

CASE 41 MCDonald's Great Britain-The Turnaround Group Test oraris orks New menus, improved service, advertising, opening new stores, clos. for making tham fat to a savagely critical best-selling book, Fast ing ohers, and refurbishing olhers have propelled McDonald's W.S. Food Nation (which reveated, among other things, that he beef' in back into an active growth cycle after ceperiencing a slack period in McDenald's patties can come from up to I00 different cows), and a 2003 and 2004 U.S. sales climbed for 24 straight montlis. Sales in his film, Stper Size We (whose maker, Morgan Spurlock, did nothGreal Britain did not show a similar movement. Sales at McDonald's ing except eat at McDonald's fon a month witlu disastrous effects to 1,235 British outlets had been sluggish fof years, and the rensons bis health, turning his liver into something approaching pt). The were numerous. New chains such as Yo! Sushi and Nando's Chicken result; Profits fell, earnings per share were down, and the firm Restaturants, which features spicy Portugucse chicken, have oulyaced famous for ils expansion was forced lo close restaurants. McDonald's. Operators such as U.S.,-based Subwny Restaurants are A recently released documentary, called McLibel, reopented pulling in custamers with fresh salads and sandwiches on focaccin old wounds for McDonald's. H/cLibel recounts the story behind a brend. Starbucks has made MeDonald's otllets look sterile and out of decade-long ccurt battle - the longest in British listory-that date. And the 2001 scare over mad cow disease, along with concerns pitted McDontd's agtilust two Greenpeace activists whom the about rising obesity, made things worse. compary accused oflibel. In 1994, McDonald's sued five London- In part because of lackluster performance in Oreat Britain, based Oreenpeace activists after they distributed lenflets that Mrconanld's European opecations-me the second biggest market af- asked, "What's Wrong witli McDonald's?" Three pulled out, but ter Anerica, responsible for about 30 perecnt of profits, have suf. two fought the chain. After initially being ordeced to pay damages, fered. In 2005 , European sales tell 0.7 percent, while U.S. sales the two appealed twice, then took their complaint to the U.K.'s grewy 4.7 percent. Futhermore, same-store sales for European res- Court of Human Riglits, claiming that a lack of access to leggni aid laurats open more than a year registered a 3 percent decline. hurt theic right to a fair trail. The court sided with the activists, To give you a Bavor of what McDonald's U.K. faces, here are giving the goverament three months to appeal. At the time of the sonte observations about MeDonald's Britain, .. ... decision, McDonaid's said the world has moved on since then, and so has MeDonald's. There atre some positives for NicDonald's U.K. For all its pesCOMMTSMWS RON VARTOUS; Geived problems, McDonald's profits are Elle million a year. NEWSS 5 UFxFE Neatly 3 million people visit its Brikish branches every day, and anong teenagers, McDonald's is still the number one food brand. VEWS SOURCES Neatly 3 million people visit its Brikish branches every day, and - A 24-year-old advertisisg sales representative in West anong teenagers, McDonald's is still the mumber one food biand. Loudon commented, "The McDonald's near where I work is to McDonald's in Britain, rating them "megative," "neutral," or really smat, with Internet access and everything, but I vuly "positive." [t 2004, most reports were negative, but in 2005 , opingo in there as a last resort." lon had moved to pretty much neuiral ground. - "Twerty-thiee yeurs ago, or thereabouts, I had my first McDonald's. I was studying at Cambridge and group of is STFPS TAKEN TC OEVEGE drove to London to watch a fuolball match. We stopped off at McDonald's in the Strand and [ experienead the joys of a Big Mac with fries, to ga. It felt like the height of cool. I was from Cumbria, and McDounld's, which came to this - McDonald's has rolled out new offerings, including salads, counlyy only in 1974 , hadi't yet pernetrated that far northi, yogurt, and other fare aimed at health-conscious diners. To My friends were Londoners, tip p3 dead trendy. They had cars develop naw recipes, the company has opened a test kitchen at university, they drove to see the capital's smaxter teains, in Europe, tt is also plamning facelifts for many of its 6.200 Europeari outlats. and they ate at MCDonatd's. "Recently, I popped into the same outlet in Strand and - McDonald's temporarily dropped its globally recogrized clearly, it's not just fashion that shifts: my taste buds have Golden Arches logo in ads in the United Kingdom in an altered too-meither that or after two or three pints at a footbalt attempt to chnnge customers' perception and emplasize a nesv ground, anything seems delicious. Esclewing the option-as "healtly menu." The two-week campaign, called "Change," most of its customers to-lo go lealthy and order a salad, I carried the tug line: "theDondd 's-- Bur not as you knosy it," went for a traditional doubic cheseburgece. The burger bun The ads show healthy neals such as futits and salnds. tasted like colton or wool, the beef in the burger patty lacked - The Big Tasty, a burger on an oversized burt introdued last texture. It was manufactured, processed and quick.". year, is selling well, the company soys. Some ppine that like all empices, MlcDonald's has had its day * In April 2004, a Salads Plus menu, which tentures four dis uow on the slippery slope to oblivion. McDonald's could go varieties of main-course saluds topped with warm chicken, a way a[ Howard Jolsson's, another restaurant chain that once premium chicken sandwich, and a fruit-and-yogurt dessert. vered America but now has all but disuppeaced. was introchtead tu Britain. Everything lias been hurled at the company, from fents about - In response to demands for more nutritiunal information on Wacting mad covy disease to two teenge girls suing the company McDonald's menu, thay liners were tused to convey dietary 8 information. At the top of the tray liner is an appeal for have been changing, and we laven't noticed. In the last RMCC (Ronald McDonald Children's Charitics), and on four or five years, a raft of companies have come to the the flip side is a detailed breakdown of nutritional and marketplace that have done a better job of jdentifying allergy information. Every iten available in a McDonald's those changing tastes. is listed, from the obvious-a Big Mac at 493 calories. " want McDonald's to be the U,K's breatcaist restaurant. 22,9 grams of fat, and 5.9 grams of fiber-m.to the less Housebolds bave been blitzed with new menus, iagluding obvious -mineral water comprises no mata, no seafood, no toasted bagels and toast, and sampling deals. I wart people gluter, and no egg and is suitable for vegetarians. No other to try it, to compgars us. Breakfast is a huge opportunity for restaurant chain goes in for this analyticat overload. One us. We can tse our drive-thru to offer lattes and toasted observer's reaction to tha nutritional detail was less than bagels to people on their way to work. positive: "The anount of detail is mind.boggling, and one immediate task is to assuage the franchisees and they aren't the healthiest foods on the planet, and you'ros plilosophy is that we'de like a three-legged stool-mstaff? disturbing. You come in for a fast burger and fites, knowing assailod with a battery of facts and figures that merely supplieirs, and owner-operators. - McDonald's feels itsclf under siege from diet campuigners Does he eat at MaDonald's? Not every day, but dure times a confirm what you already know." and food experts as well as competitors pushing "healthy" Week. His favorite-the double cheeseburger. salads and even bread-flee sandwiches. To some it saems though it is still the second best-krown brand in the world, - Aiming to boost its popularity among women, McDonald's After five consectitive years of sales decreases, MoDonald's was sellbehind only Coca-Cola. Jaunched an ad programi in April 2005 fealuring the ing nore burgers than at any time sunce it arrived in Britain 34 years performars Destiny's Child. The campaign features its . earlier, In 200%, sales were up 4.6 percent for the year, with a sulstanSalads Pjus nenu with the addition of chickert salad with thal increase in market ghare. Although still lagging the performance pasta, which includes roast peppers, basil, and cherry of other regions in the European division, the positive report seemed tomatoes. A low-fat, grilled-chicken Caesar fiatbread will to signal that the steps taken by U.K. management were beginning to replace the grilled chicken flatbread item launched six pay off. Menu changes, refurbishing and/or closing stores, opening months earlier. The company has also repluced its dressing new stores, and polishing the public image can all be attributed to the on its Sulad Plus, which was criticized for its fat content, apperent turnaround. The most salient events follow: replace the grilled chicken flatbread item launcued six months earlier. The company has also replaced its dressing new stores, and polishing the public image can all be attributed to the on its Sulad Plus, which was criticized for its fat content, apparent turneround The most salient events follow: with lower-calorie, lower-fat yersions. - In response to the rise of coffee slops, McDonald's is serving coffes made from freslly ground Kenco beans. relts, onion rings with sweet chill dip, and even better coffee, including lattes, were introduced to appeal after introduction. Wo're not innovating the way we tsed to, we're not leading diversity of options on the menu and the fiexibility stores had the way we used to. The world is changing-our customers. in their offerings. Meras have charged more in the past three - We will upgrade the McDonald's experience and give more . it needed to become "more Euuropean" and more "tocally televant." A separate fpod factory in Murich dedicated to - We've slipped. In the area of service, it has become spartari coming up with new menus for the difterent tastes in the and inconsistent. Our cleanliness didn't just used to be good, 4 Europear countries where McDonald's operates was a it used to be great, We need to get back to basics. The first move away from baving the same menu in il its branches. part of back to basics is giving the customers the choice they A complete overhaul af two French stores with aew designs want. The second is making suro service and cleanliness are for irterfors and uniforms led to sales increases in excess of great. I'm tinding out what's inportant, and I'm reacting to it. 4 percent compared with stores with traditional dcor. - We're the innovators, we're the leaders. Our customers are Althougli considered radical at the time and not altogether outspoken and they criticize. MYy job is to understand the consistent with McDonald's philosophy, the suceess of the problem and to lead. If we can get this right, our customers refurbished stores resulted in a management deciston to including the United Kingdom, A design studio in Paris was only the lirst step in a fight to transform the company's established to create nine different chesigns from which inage. franchised restaurants coutd choose the design most - What loaked like a disister for McDonald's, with bad approprinte for theid localion and clientels. publicily created by movies such as Super.Sire M an and - The restructuring in Britain resuled in the closing of books like Fost Ford Nothon, which attacked fast-food underperforming stores, news stores opened in upscale restaurants, and the worldwide concermabout obesity may locations, and ofd stores refurbistied. Boltecl-down plastic have proved the inpetus for the rebirth of a lumbering yellow-and white furniture gol replaced with lime-green superannuated giant that icconald's had become. designer chairs and dark leather ipholstery, notern lightiog, and wireless lntertet access, sith renlal iPods. This redecoration was the biggest revamp by the company in QUKSTIONS mo'e than 20 years, ending a oue-size-firs-all philosoply at 1. Identify the problems confronting ifcDonald's U.K, and list its 1,220 U.K. outlets thal had made them look decidedly them from the most to the leust critical. For each problem dowdy. McDonald's kept its tridemark Colden Arches logo but got rid of the red accompanying it. Iostend, restatrants identified, explain your reasoning svggest nkarket reseacch feature a warm burgundy color. The pointy roofs are being 2. Sone problems you identifed in Question I may require a phased out and replaced by simple olive greer fncades, and "qquick fix" in the short run, while others may requiie a major the brighi neon lights in the restaurants were dimmed. slift in company strategy. Asstuming thal you cannot focus on - Compounding the problem of negntive perceptions of the all the problems at once, sugeest the prder in which the issues quality and healthiness of kast food was a negative attitude problem. toward McDoould's as an employel: As one company executive said, "The British people don't respect those who 3. 3 y 2007 , it seemed that the decisions made by MleDonaded's work at MeDonald's because they mix up service with W.K. manngement had begun to pay off. Hotvever, MCDonald's being servile." Popular views of M EDonald's paying bad U.K. still lugs behind the performance of other regions in the wages to desperate teenager's led to the coining of the teem European division. Conside'ing your responses to Questions I "McoJob" to describe someone working for low pay in a job and 2, identify probleliss that may still exist and suggest actions with no futture. to be taken. - To counter this negntive insge of McDonald 's, an advertising carnpaign argued that a Mlcfob is actually rather goad. MteDonald's says 80 percent of its managers began in the - Compounding the problem of negntive perceptions of the should be addressed and suggest an approach to solving ench quality and healthiness of bast tood was a negative attitude problem. toward MicDooald's as an employer: As one company executive said, "The British people don't respect those who 3. By 2007 , it seemed that the decisions made by MlcDomaidd's work at McDonde's because they mix up service with W.K. mangement had begun to pay off. However, MeDonald': being servile." Popular views of enDonald's paying bad U.K.. still lags behind the performance of other regions in the wages to desperate teenagers led to the coining of the teem European division. Considering your responses to Qtiestions I "MhJob" to descritse someone working for low pay in a job and 2 , identify problems that may still exist and suggest actions to be taken. with tho future. - Tu counter this negative innge of McDonald's, an advertising campaign argued that a Nlcfob is actually rather good. MeDonalks snys 80 percent of its managers begnn in the mapping floors. April, 6, 200s; Erie Hersntur. "Wke[Donald's Europe Chliei Quits sher Salus Slitik." English Dictionaly dropped "McJob," and Merrian- Now Wilh Lithical Since: Fasl-Fogd Gian Tukes on the Critiss with Sott Lipltts MicDonald's chief executive called it a "slap in the face" to 2006: "Super Sizing MeDonaldy: Hosy utr Faad Poliee Can Trimuer a Compiay - McDorald's U.K. vice president said: "The Mlejob cam- Criltiug." Eventing Chromich (Newestitle, England), Justary "3, 3nat; "Amerism