Talk about what you understood from the case study in page 4 in our studying book Doing Great in a Weak EconomyMcDonald's Corporation/hen most firms were struggling in 2008,VV McDonald's increased its revenues from $22.7billion in 2007 to $23.5 billion in 2008. Headquarteredin Oak Brook, Illinois McDonald's net income nearlydoubled during that time from $2.4 billion to$4.3 billion-quite impressive. Fortune magazine inMcDonald'sRestaurant2009 rated McDonald's as their 16th "Most AdmiredCompany in the World" in terms of their managementand performance.ble neMcDonald's added 650 new outlets in 2009when many restaurants struggled to keep their doorsopen. McDonald's low prices and expanded menuitems have attracted millions of new customers47away from sit-down chains and independent eateries.Jim Skinner, CEO of McDonald's, says, "We do so wellevery day in 2009, 2 million more than in 2008. Nearly80 percent of McDonald's are run by franchisees(or affiliates).because our strategies have been so well plannedout." McDonald's served about 60 million customersCHAPTER 1 • THE NATURE OF STRATEGIC MANAGEMENT5McDonald's in 2009 spent $2.1 billion to remodelmany of its 32,000 restaurants and build new ones ata more rapid pace than in recent years. This is in starkcontrast to most restaurant chains that are strugglingto survive, laying off employees, closing restaurants,and reducing expansion plans. McDonald's restaurantsare in 120 countries. Going out to eat is one of the firstactivities that customers cut in tough times. A risingU.S. dollar is another external factor that hurtsThe other two firms were Wal-Mart and Family DollarStores.Other strategies being pursued currently byMcDonald's include replacing gasoline-powered carswith energy-efficient cars, lowering advertising rates,halting building new outlets on street cornerswhere nearby development shows signs of weakness,boosting the firm's coffee business, and improvingthe drive-through windows to increase sales andefficiency.McDonald's receives nearly two thirds of its rev-enues from outside the United States. The companyMcDonald's. An internal weakness of McDonald's isthat the firm now offers upscale coffee drinks like lattesand cappuccinos in over 7,000 locations just as budget-conscious consumers are cutting back on such extrava-gances. About half of McDonald's 31,000 locations areoutside the United States.has 14,000 U.S. outlets and 18,000 outlets outside theUnited States. McDonald's feeds 58 million customersBut McDonald's top management team says every-thing the firm does is for the long term. McDonald'sfor several years referred to their strategic plan as"Plan to Win." This strategy has been to increase salesat existing locations by improving the menu, remodel-ing dining rooms, extending hours, and addingsnacks. The company has avoided deep price cuts onits menu items. McDonald's was only one of threelarge U.S. firms that saw its stock price rise in 2008.every day. The company operates Hamburger Universityin suburban Chicago. McDonald's reported that firstquarter 2009 profits rose 4 percent and same-storesales rose 4.3 percent across the globe. Same-storesales in the second quarter of 2009 were up another4.8 percent.Source: Based on Janet Adamy, "McDonald's Seeks Way to KeepSizzling," Wall Street Journal (March 10, 2009): A1, A11. Also, GeoffColvin, "The World's Most Admired Companies," Fortune (March 16,2009): 76-86.

The given case study talks about the success journey of McDonalds even during the global sub prime…

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Business

Marketing

understood

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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