McDonalds Case StudyThe McDonald brothers, Richard and Maurice opened a drive-in restaurant in San Bernardino, California, in 1937. By the late 1990s, after years of declining earnings and poor customer ratings, McDonalds Corp., the largest fast food chain in the world, seemed to have lost its claim to providing the Great American Meal. The company, which was once the favorite destination of fast food lovers around the world, had been receiving low ratings on quality and customer satisfaction since the early1990s. However, under the leadership of Jim Cantalupo, who was made CEO in early 2003, and Charlie Bell, the President, McDonalds managed a relatively quick turnaround. Under the turnaround plan, McDonalds introduced substantial system wide changes that overhauled the companys products, operations and marketing. The new plan eliminated the negative elements in the system, while retaining and building on the positive aspects. No
Longer the µGreat American Meal: Through the decades, McDonald had promoted itself as the provider of the µGreat American Meal. However, by the1990s, it was clear that the company has lost its claim to that title. Changing customer eating habits, increased competition and complacence on the part of the company and its franchises, were the main reasons for the difficulties experienced by it. The 1990s saw an increasing interest in healthy living and physical fitness in the US. People realized that regular consumption of fast food could play havoc with their health by increasing their intake of Cholesterol and fat, and lead to a spate of problems related to obesity and heart disease. Instead of fast food, which comprised mainly of burgers, fries and soda, people switched to sandwiches and salads, which were perceived as healthier foods. Consequently, companys like Subway and Panera Bread, which offered sandwiches and salads in a casual dining atmosphere, began to take over the customer base of fast f
b. In 1991, however, those customers started to move to the more extreme side of the fast food industry and to food which had traditionally been low in calories. Despite the popularity of a variety of fast food establishments and the growing consumption of fast foods, many companies like McDonald’s, Pepsi, Starbucks, Safeway and the McDonald’s Restaurants of America (MTA) continue to promote unhealthy eating habits. By promoting the unhealthy lifestyle, the franchisees also drive a vicious circle of food surpluses. Many McDonald’s, like Subway and Panera.com, make their customers drink expensive soda and sugary drinks without paying a significant price, while others, like McDonald’s, have a healthy diet and follow a more consistent diet.
FDA reports that most fast food restaurants offer only two or three servings of the diet of a single serving; that is, the menu item will often include more fat, more salt and more calories. Moreover, most fast food companies in the US are very expensive, and therefore many fast food fans simply do not want a restaurant with a lower cost of living. Nevertheless, a recent study conducted by the Health Insurance Information Centre (HIC) in the UK found that there was a strong correlation between prices at fast food restaurants and food consumption habits, and the prices were influenced largely by which restaurants had the highest prices. The study found that the restaurants with the lowest quality restaurants (those that used high prices) were almost equally high in calories and saturated fat. However, a smaller amount of saturated fat was found in the cheaper burgers and fries. This led to oversupply and unhealthy eating habits in consumers. According to a 2007 study in Journal of Food and Beverage Research, the food industry (the public and private sectors) spent 4.5 billion Euro ($4.3 billion) on food expenditures in 2007, and it cost almost 2 percent of total consumption. There were also significant health problems in many McDonald’s franchises, such as a significant increase in cancer in some franchises, increased intake of sugar in some franchises, and higher levels of heart disease among some franchisees. Furthermore, there were several health problems in many McDonald’s locations (including cancer) and many diseases, such as liver failure, heart attack, and stroke caused by the fast foods.
The number of fast food restaurants having unhealthy diet have also increased markedly over the years. In 2011, 3 million restaurants in the US were serving unhealthy meals. But only around 8.5 million fast food restaurants are serving healthy meals, so overall the number of fast food restaurants catering to both high intake of carbohydrates and high calorie fast food is far lower than the 7.5 million restaurants serving the same amount of healthy meals serving other brands. These are the foods that most consumers of the fast food chain are interested in: Subway restaurants, Panera McDonald’s, Safeway McDonald’s, Subway Subway Catties and those of others, like some McDonald’s franchises.
References:
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