McDonald's: Cantalupo's Challenge


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Case Details:

Case Code : BSTA069
Case Length : 19 Pages
Period : 2003
Organization : McDonald's
Pub Date : 2003
Teaching Note :Not Available
Countries : Global
Industry : Restaurants

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Background Note

Early History
In 1941, brothers Richard and Maurice McDonald set up a "drive-in" restaurant in California that offered a 25-item menu. During this time, drive-ins were a new concept. Waiters (carhops) went from one car to another, taking orders from customers. The brothers hoped that this service would attract customers who did not have the time to come in to a restaurant to order...

Recent Developments
During the 1990s, McDonald's began to face problems due to changing customer preferences and increased competition. Customers preferred to eat at home using microwave ovens to heat food. They also became more health conscious and avoided red meat and fried food...

McDonald's Woes

McDonald's problems in the early 2000s could be largely traced back to its growth strategy. The company's strategy for several years had been simple- consistently increase the number of franchise and company owned stores, thereby collecting a steady stream of royalty revenues.

However, this was not the case in the beginning. When the McDonald brothers started the restaurant, their aim was to offer high quality menu at competitive prices, coupled with a self-service concept.

This, they thought, would build the restaurant's identity and help them in entering different markets as and when the need arose.

Keeping this growth plan in mind, they had set out to standardize their cooking procedure and kitchen layout so that new restaurants opened would look identical and serve food that tasted the same throughout the chain...

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