Essay on Mcdonalds Case Study

3346 Words Sep 26th, 2014 14 Pages
McDonald’s Corporation in the New Millennium
J. Paul Peter and Ashish Gokhale University of Wisconsin—Madison

Jack Greenberg, CEO of McDonald’s Corporation, stared into the clear September skies thinking about the “Big Mac Attack.” At one time, the term was an advertising slogan referring to a craving for a McDonald’s Big Mac burger. However; “Big Mac Attack” now referred to McDonald’s earnings declines in the late 1990s and early 2000s. Dynamic market expansion, new products, and special promotional strategies had made McDonald’s Corporation a leader of the fast-food industry. However, sales growth in the United States had slowed to below the industry average in recent years. Jack Greenberg was trying to decide on a set of appropriate
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The average fast-food restaurant has sales of about $560,000 per year.

Another segment of the fast-food industry is comprised of a number of non- hamburger fast-food restaurants. Major players in this segment include Pizza Hut, KFC (Kentucky Fried Chicken), and Taco Bell. Sales in these restaurants have grown faster than hamburger chains in recent years. A growing trend is the move by customers to non-hamburger sandwiches. Subway dominates the market with more than 13,200 U.S. outlets. Prepared meals and sandwiches available in supermarkets, convenience stores, and gas stations are competitors as are the variety of microwave meals available to consumers.

Another trend is the recognition of the importance of heavy users of fast-food restaurants. It is estimated that heavy users comprise 20 percent of customers but account for 60 percent of all visits. Some of these customers visit fast-food restaurants 20 times per month and spend up to $40 per day in them. Heavy users have been described as single males, under 30 years of age, who have working-class jobs, love loud music, don’t read much and hang out with friends.

A major change in the fast-food industry is the increase in the fast-casual segment that includes restaurants like Boston Market, Panera Bread Company and Atlanta Bread Company. These chains offer deli sandwiches and meals that are more upscale than traditional fast food, served in nicer restaurants with more comfortable

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