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The Mcdonald’S Case: Strategies For Growth

THE MCDONALD’S CASE: STRATEGIES FOR GROWTH
Lintje Siehoyono
Lecturer, Hotel Management Program
Faculty of Economics Petra Christian University
Email: slintje@peter.petra.ac.id
Le Hoang Giang
Press officer in Canadian Consulate, entrepreneur, hospitality consultants in Ho Chi Minh City
Email: gianglevn@yahoo.com
Abstract: This paper presents a case study of international franchising, focusing on fast-food sector.
McDonald's is one of the world's premier entrepreneurial success stories. However, early in 2003,
McDonald’s has announced a re-structure plan including cutting jobs, closing many restaurants and slowing
down the expansion plan. What went wrong with McDonald’s and what can other international franchises
learn from these mistakes are investigated. Result shows business environments, corporate level strategies,
and operations are the key issues.
Keywords: McDonald’s, international franchising, fast food.
In a global scale, the fast-food industry is facing
some serious threats. First, the fast-food market has
reached the boiling point in most of the main market
such as United States, Germany, and United
Kingdom. The war price of fast-food giants is a clear
example of market saturation, for example, Wendy’s
chain has introduced a lowest ever price value meal:
99p. In terms of the product life cycle, quick service
restaurants have reached maturity stage. Figure one
illustrates the life cycle of quick service restaurant in
United Kingdom.
* Source: http://www.thetimes100.co.uk/
Figure 1. Quick Service Restaurant Product Life
Cycle
Second, rising incomes allow people more
opportunities to turn eating out into a more individualised
experience rather than a routine 'quick fix'.
In United Kingdom, market research reveals that the
total number of meals eaten in the non-quick service
restaurant sector has risen while meals eaten in the
Quick Service Restaurant sector have fallen in total
(The Times 100, 2003). In United States, the...