McDonald’s Winning Strategy

Research Paper

McDonald’s Winning Strategy

Strategic Change Management

Ksenia Bratkova

Husson University

Abstract

This paper contains information about “Plan to Win” strategy implemented by McDonald’s in 2003. This strategy appeared to be very successful and helped the company to  make significant changes in improving McDonald’s service and operations.

Key Words: transformational change, business strategy

Transformational change is very typical process in the business environment. This process involves a company making a radical change in its business plan. It often requires companies to make significant changes in company structure and management, or sometimes even in its culture. Why does it happen? Most of the time transformational change occurs in response to technological changes or in response to crisis. Sometimes the reason for change hides in order to reposition the company in the market.

McDonald’s is one example of the company that had experienced several transformational changes in order to rebrand and reposition themselves in the market. McDonalds started to face first losses since 2001(Oak, 2004). The company ended 2002 with its first quarterly loss since 1954 and its stock dropped significantly (Oak, 2004). Customer satisfactions surveys showed that McDonald’s was very far behind its competitors Wendy’s and Burger King. Customers became more health cations and were switching to more healthier food options. Customers complaints were raising due to quality, service, and cleanliness conditions at MacDonald’s locations (Oak, 2004). On top of everything anti-junk and anti-obesity campaigns became more active which threatened the business and caused downside in sales as well. The need for change became more obvious.

In 2004, McDonald’s hired a new CEO, Jim Skinner. Jim Skinner began his career working at McDonald’s as a restaurant manager trainee in 1971. He did not have any college background, but he has served ten years for the United States Navy. His career at MacDonald’s began right after serving the NAVY. He quikly advanced in his management career and held many leadership positions within a company (McDonald’s Web). Skinner is one of most recognizable leaders who participated in McDonald’s worldwide revitalization plan launched in 2003. Under his leadership the company went through a long process of transformational change. He is the person who turned the company around and completed the change successfully (McDonald’s Web).

In 2003, McDonalds in charge with Jim Skinner implemented a new “Plan to win” strategy. The idea of the new strategy was to change McDonald’s vision completely. The management team planned to move from quick service and cheapest food business model to more customer- oriented. The company changed its mission statement from “The world’s best quick service restaurant” to a new mission statement that focused more on customer satisfaction “Being our customer’s favorite place and way to eat”. (Bindhu, 2017) The new strategy focused on five basic concepts for improving customer experience: People. Products, Place, Price, and Promotion. The strategy was also based on what Skinner thought as three important components: operational excellence, leadership, marketing and innovation. His winning strategy focused all team members on improving customer service, investing more finances into the food quality and ambience (Bindhu, 2017).