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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Talk about what you understood from the case study in page 4 in our studying book

Doing Great in a Weak Economy
McDonald's Corporation
/hen most firms were struggling in 2008,
VV 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
McDonald's
Restaurant
2009 rated McDonald's as their 16th "Most Admired
Company in the World" in terms of their management
and performance.
ble ne
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
47
away from sit-down chains and independent eateries.
Jim Skinner, CEO of McDonald's, says, "We do so well
every day in 2009, 2 million more than in 2008. Nearly
80 percent of McDonald's are run by franchisees
(or affiliates).
because our strategies have been so well planned
out." McDonald's served about 60 million customers
CHAPTER 1 • THE NATURE OF STRATEGIC MANAGEMENT
5
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
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 rev-
enues from outside the United States. The company
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 extrava-
gances. About half of McDonald's 31,000 locations are
outside the United States.
has 14,000 U.S. outlets and 18,000 outlets outside the
United States. McDonald's feeds 58 million customers
But McDonald's top management team says every-
thing 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, remodel-
ing 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.
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.
Source: Based on Janet Adamy, "McDonald's Seeks Way to Keep
Sizzling," Wall Street Journal (March 10, 2009): A1, A11. Also, Geoff
Colvin, "The World's Most Admired Companies," Fortune (March 16,
2009): 76-86.
Transcribed Image Text:Doing Great in a Weak Economy McDonald's Corporation /hen most firms were struggling in 2008, VV 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 McDonald's Restaurant 2009 rated McDonald's as their 16th "Most Admired Company in the World" in terms of their management and performance. ble ne 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 47 away from sit-down chains and independent eateries. Jim Skinner, CEO of McDonald's, says, "We do so well every day in 2009, 2 million more than in 2008. Nearly 80 percent of McDonald's are run by franchisees (or affiliates). because our strategies have been so well planned out." McDonald's served about 60 million customers CHAPTER 1 • THE NATURE OF STRATEGIC MANAGEMENT 5 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 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 rev- enues from outside the United States. The company 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 extrava- gances. About half of McDonald's 31,000 locations are outside the United States. has 14,000 U.S. outlets and 18,000 outlets outside the United States. McDonald's feeds 58 million customers But McDonald's top management team says every- thing 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, remodel- ing 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. 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. Source: Based on Janet Adamy, "McDonald's Seeks Way to Keep Sizzling," Wall Street Journal (March 10, 2009): A1, A11. Also, Geoff Colvin, "The World's Most Admired Companies," Fortune (March 16, 2009): 76-86.
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