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McDonald's 2009 Growth Strategies and Analysis

McDonald's was able to increase revenues and profits during the economic downturn of 2008 while most other restaurants struggled, through strategies like adding new locations, remodeling existing stores, and keeping prices low to attract customers. McDonald's continued expanding and remodeling its 32,000 locations globally in 2009, while most other chains cut back, and saw continued sales growth. McDonald's success is attributed to well-planned long-term strategies focused on the customer experience and global growth.

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229 views1 page

McDonald's 2009 Growth Strategies and Analysis

McDonald's was able to increase revenues and profits during the economic downturn of 2008 while most other restaurants struggled, through strategies like adding new locations, remodeling existing stores, and keeping prices low to attract customers. McDonald's continued expanding and remodeling its 32,000 locations globally in 2009, while most other chains cut back, and saw continued sales growth. McDonald's success is attributed to well-planned long-term strategies focused on the customer experience and global growth.

Uploaded by

saso
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

When most firms were struggling in 2008, McDonald’s increased its revenues from $22.

7 billion in 2007
to $23.5 billion in 2008. Headquartered in Oak Brook, Illinois McDonald’s net income nearly doubled
during that time from $2.4 billion to $4.3 billion—quite impressive. Fortune magazine in 2009 rated
McDonald’s as their 16th “Most Admired Company in the World” in terms of their management and
performance.

McDonald’s added 650 new outlets in 2009 when many restaurants struggled to keep their doors open.
McDonald’s low prices and expanded menu items have attracted millions of new customers away from
sit-down chains and independent eateries. Jim Skinner, CEO of McDonald’s, says, “We do so well
because our strategies have been so well planned out.” McDonald’s served about 60 million customers
every day in 2009, 2 million more than in 2008. Nearly 80 percent of McDonald’s are run by franchisees
(or affiliates).

McDonald’s in 2009 spent $2.1 billion to remodel many of its 32,000 restaurants and build new ones at a
more rapid pace than in recent years. This is in stark contrast to most restaurant chains that are
struggling to survive, laying off employees, closing restaurants, and reducing expansion plans.
McDonald's restaurants are in 120 countries. Going out to eat is one of the first activities that customers
cut in tough times. A rising U.S. dollar is another external factor that hurts McDonald’s. An internal
weakness of McDonald’s is that the firm now offers upscale coffee drinks like lattes and cappuccinos in
over 7,000 locations just as budget conscious consumers are cutting back on such extravagances.
About half of McDonald’s 31,000 locations are outside the United States. But McDonald’s top
management team says everything the firm does is for the long term. McDonald’s for several years
referred to their strategic plan as “Plan to Win.” This strategy has been to increase sales at existing
locations by improving the menu, remodeling dining rooms, extending hours, and adding snacks. The
company has avoided deep price cuts on its menu items. McDonald’s was only one of three large U.S.
firms that saw its stock price rise in 2008.

The other two firms were Wal-Mart and Family Dollar Stores.
Other strategies being pursued currently by McDonald’s include replacing gasoline-powered cars with
energy-efficient cars, lowering advertising rates, halting building new outlets on street corners where
nearby development shows signs of weakness, boosting the firm’s coffee business, and improving the
drive-through windows to increase sales and efficiency.

McDonald’s receives nearly two thirds of its revenues from outside the United States. The company has
14,000 U.S. outlets and 18,000 outlets outside the United States. McDonald’s feeds 58 million customers
every day. The company operates Hamburger University in suburban Chicago. McDonald's reported that
first quarter 2009 profits rose 4 percent and same-store sales rose 4.3 percent across the globe. Same-
store sales in the second quarter of 2009 were up another 4.8 percent.

Questions:
1. Which theory of organizational adaptation is applied at McDonald's? Discuss.
2. Conduct the environmental scanning of McDonald's through SWOT analysis.

3. Discuss any 2 strategies used at McDonald's. Elaborate.

4. Under which strategic type, can McDonald’s be classified? Elaborate.

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