DEMAND FOR THE BIG MAC ON THE RISE (NYSE:MCD)

I. STATEMENT OF THE PROBLEM

McDonalds has to respond to a changing business environment, with customers
changing preferences and the growing number of competitors.

II. AREAS OF CONSIDERATION

Factors affecting the problem:
o Sales
o Management decisions
o Economy status (Foreign Currency)
o Stock Price
o Customer Demand

III. ALTERNATIVE COURSES OF ACTION

a.) Strength ( Internal )
o Strong brand name, image and reputation
o Large market share
o Introduction of new production
o Technology innovation
o Broad geographical locations
o Grow its customer base
o McDonalds restaurants in over 100 countries reported February comparable
sales results on March 9 that showed global sales rising 1. 4%year even as Feb.
2008 included an extra day due to leap year .
o U.S McDonalds gained on the back of the chicken line-up, the core menu,
especially the QUARTER Pounder, and the popularity of its breakfast.
o McDonalds stock price is getting to be attractive to the investors when it comes
to short-term and long-term investments.

b.) Weaknesses ( Internal )

o Has been around for long time therefore important to keep innovating
o Unhealthy fast food
o Negative publicity
o Customer loses due to fierce competition
o McDonalds dont consider the proper management decision or plan when it
comes to external factors that will affect their revenue such as foreign currencies.

c.) Opportunities ( External )

o Growth of the fast food industry
o Globalization, expansion in other countries
o Low cost menu is preferred by large

d.) Threats ( External )

o Intensity Competitors
o Public health crisis
 o Economic recession
o Serious environmental issue
o McDonalds did not provide any actual numbers on the commodity cots that
commodity pressures are expected to have a greater impact on result in the first
half of the year.
o McDonalds warned on March 9 that volatile foreign currency exchange rates and
commodity costs would pressure revenue and margins in the first quarter.
o Growing customer base will be just a temporary trend and as the economy
improves, families will revert to their old routines and start to frequent the local
and chain restaurants more.

IV RECOMMENDATIONS
o McDonalds should continue to expand value menu and healthier menu options.
o They should consider the foreign currencies or economic status in their other
branches that will have a great impact in revenue.
o Company should focus on this strength to develop stronger. However, the
company seems not diversify its products regularly while competitors are stronger
and have new products gradually. Because of this reason, McDonalds should
spend more money on Research and Development to create new products and
services as well as increase the efficiency of operations. First, one thing McDonald
should focus on is that the play place for kids. McDonalds has play place but not
in every restaurants. If you eat in McDonalds restaurant, you can be free to party
while your children play at the place for kids. Customers love this service. Thus, if
it is popularized in all restaurant of company, customers will be more satisfy and
of course they want to comeback regularly. Moreover, toys have to be cared much
more with many new interesting toys as well as safety. Jolly Bee is one brand
which applies this strategy very successful. McDonalds can learn from Jolly Bee
developing this service to improve its market position. Next, even if the companys
menu is still relatively inexpensive compare to that of its competitors, it is not totally
enough. Because apart from price, customers also make decision rely on menu.
V. ACTION PLAN
PROGRAM ACTIVITIES TIMEFRAME
Value meal Create new products that January-May
is affordable for the June-December
customers.
Healthier menu options Develop different courses Every 3 months there
of healthy menu such as would be new healthy
desserts. menu to offer.
Marketing plan Officers meeting that is Results can be analyzed
related in market share, regularly to see whether
sales and goals. objectives are being met.
Customer analysis plan customers perspective Monthly survey
have changed,
McDonalds needs to
evolve
CASE ANALYSIS

Submitted to:
Prof. Acosta
Submitted by:
Almonicar,Abegail
Apolinar, Robert
Biscocho, Mary Rose
Bolido, Claudine
Buenaventura, Rehma Lyn

CBET 01-502A