Mcdonald's Corporation - Success Strategies in Recessionary Environment


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Case Details:

Case Code : BSTR322
Case Length : 21 Pages
Period : 2007-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : McDonald's Corporation
Industry : Food and Beverage
Countries : US

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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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A 'Recession-Resistant' Company Contd...

According to Carol Pepper, Head of Pepper International5, "I think they have a winning formula from a bottoms-up perspective. As a company, it is providing value for the dollar, convenience and it's helping consumers weather the recession in the US."6

McDonald's was one of the two companies7 on the Dow Jones Industrial Index to post a higher stock price at the end of 2008 as compared to the beginning of the year.

The stock price of McDonald's increased by 6% during the year (Refer to Exhibit I for stock price chart of McDonald's between April 2006 and March 2009).

The company's profit for the year increased by 80% from US$ 2.3 billion in 2007 to US$ 4.3 billion in 2008.

However, McDonald's did not fare well in the last quarter, when its net profit fell to US$ 985 million from US$ 1,273 million in the fourth quarter of 2007.

Commenting on the company's performance, www.america.gov8, a website stated, "But few companies, if any, have performed better than McDonald's and Wal-Mart during the current downturn...All fast-food restaurants benefit from consumers switching to cheaper alternatives when dining out, but none so much as McDonald's."9 ...

Excerpts >>

5] New York-based Pepper International provides services like money management, general planning, tax planning, philanthropy, etc. to families.
6] Stephanie Dahle, "McDonald's Loves your Recession," www.forbes.com, February 17, 2009.
7] The other company was the US-based retailer Wal-Mart.
8] www.america.gov is run by the Bureau of International Information Programs and provides information about foreign policy, society, and values, for international audience.
9] Andrzej Zwaniecki, "McDonald's, Wal-Mart Beat Recession, Market Gloom," www.america.gov, December 18, 2008.


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