ST. LOUIS ANNE COLLEGES OF SAN PEDRO LAGUNA INC.

Old National Highway, Brgy. Nueva, San Pedro, Laguna

MCDONALD’S UNHEALTHY IMAGE AND WHY

IT CAN’T SHAKE IT

(BAHALA NA GROUP)

Kate Villamarzo

Kurt Allec B. Lacre

Liza R. Macha

Chona Mae T. Gravamen

Liezel E. Maravillas

Bachelor of Science in Business Administration Major in Marketing Management

(Prof, Ferdinand Lanzanas)
 I. Introduction
McDonald's is a multinational fast-food chain that has grown and expanded since
1940. This is built by the McDonald's brothers and now the founder is Ray Kroc. Originally this
started as dining in restaurants and became part of the fast-food industry. Now that they have 40,
031 restaurants in the world, is this enough when they have an unhealthy image to the public?
Well unfortunately this unhealthy image became the reason why their sales were damaged. The
time when McDonald’s we're going to test their new breakfast bowl the analyst from Janney
Capital Market leaked news that brought them to the cliff.

II. Background
According to Janney Capital Markets Janney's survey, which was first taken in 2003,
found that restaurant owners rated both their corporate ties and business outlook poorly. The
respondents' view for the next six months was likewise the lowest since the survey's
commencement. Mark Kalinowski, a Janney analyst in New York, stated in the report. Based on
a number of responses, the situation was the worst they had ever witnessed, he claimed. The
problems faced by McDonald's new CEO, Steve Easterbrook, are made worse by the company's
strained relationships with its franchisees. He took the reins last month after the fast-food chain
got mired in its worst sales slump in more than a decade McDonald's frayed ties with its
franchisees add to the headaches of new Chief Executive Officer Steve Easterbrook. Franchisee
input prompted Janney to lower its March sales forecast. According to Kalinowski, who has a
neutral recommendation on McDonald's, the investment bank is now projecting a fall in U.S.
same-store sales of 3.7 percent, which is a more dismal prognosis than the 3 percent consensus
forecast.

The feedback from franchisees led Janney to trim its sales projection for March.
According to Kalinowski, who rates McDonald's as neutral, the investment bank is now
forecasting a fall in U.S. same-store sales of 3.7 percent, which is a more dismal prognosis than
the 3 percent consensus of forecasts. The historical average of the survey is 2.8, and its all-time
high was 3.46 in February 2004. The kale controversy is indicative of McDonald's numerous
efforts to regain customers and boost revenue. These tactics haven't done much to reenergize the
company thus far. April have seen a 2.3 percent decline in U.S. sales, despite new "initiatives
and menu offerings," a McDonald's press release said. McDonald's has introduced a new salad
with "nutrient-rich lettuce blend with baby kale," shaved parmesan, and chicken in an effort to
provide healthier menu offerings (grilled or fried). It can initially appear to be a healthy choice,
like many fast-food salads, but it's not. The salad contains more fat, calories, and salt than a
double Big Mac, which is a sandwich made with four beef patties, when combined with the
restaurant's Asiago Caesar Dressing. The problem faced by McDonald’s and for those who do
not know, here are the problems that you will know. Chris Muller, expert on chain restaurant
management at Boston University, no matter how much they enhance the quality of their
products, the brand can't quite shake its reputation for producing sugary, processed, and
unhealthy foods, especially among millennials. The McDonald’s new CEO, Steve Easterbrook,
he is focusing on restructuring the entire business, from executives to cashiers. Meanwhile,
according to Muller "There's an underlying demographic problem: an entire group of millennials
has been trained not to eat at McDonald's."

According to Stephen Mazeika, a spokesman for the McDonald's Corporation,

McDonald's is devoted to offering its customers "more balanced choices" and "nutritious offers
like fruits and vegetables." and the company is "always working to share information and
progress about these initiatives" through social media and traditional advertisement.

III. Case Evaluation

Why is McDonald's regarded as having a negative image? because it has numerous

negative consequences on people, such as obesity, and therefore McDonald's needs to adjust the
content of its advertising. The majority of McDonald's television advertisements show unhealthy
fried food, and their roadside and outdoor advertising also uses pictures of Big Macs and Kids
Meals (Exhibit J). Children respond to recollection more than any of their other sensory
receptors, as we've already explained. and McDonald's could advertise the healthier food options
it offers to draw more customers into eating there.

IV. Proposed Solution

Solution 1: In an effort to outperform the competition, McDonald's has experimented

with both cost leadership and differentiation. They were among the first in the field to provide a
modest, inexpensive menu of things from their product line for just $1. A company can only use
a low-cost strategy so long before it starts to lose money. Cost leadership is McDonald's chosen
strategy. The goal of this strategy is to provide items at a reduced cost. McDonald's provides
goods at lower prices than its rivals since it is a low-cost provider. As a supplementary approach,
the corporation also employs broad differentiation. Developing the company and its products to
set them apart from rivals is necessary for this. For instance, McDonald's employs a broad
differentiation strategy for its McCafé offerings.

Solution 2: McDonald's has a bad reputation for serving unhealthy and preservative-
laden foods. Many millennials are conscious that they might get fat if they eat at McDonald's.
Steve Easterbrook, the new CEO of McDonald's, came up with a plan to create healthy foods by
not using any preservatives. McDonald's announced that burger patties in the USA are 100%
inspected by USDA, which stands for the United States Department of Agriculture. They also
said that the only thing that they were adding was salt and pepper when the patties were sizzling
hot on the grill. Pickles were the only thing that contained preservatives, so it's up to the
customers if they didn't like it or not.

V. Conclusion

McDonald's Corporation is the leading global provider of fast food with operations in
more than 121 nations and more than 30,000 outlets. McDonald's employs more than 1.5 million
employees and feeds more than 96% of the world's population at least once a year in order to
service all of its customers and show off the enormous size of the business. McDonald's is a fast-
food restaurant franchise that mostly sells hamburgers and French fries, although it also sells
other items such chicken, salads, and fish16. Since opening its initial restaurants in the early
1950s, McDonald's has expanded at an amazing rate because to an internal concept known as
"expand at all costs," which entails opening as many locations as possible as quickly as possible.
At the height of the business' expansion, a new McDonald's store opened every four hours, 365
days per year. The management ingrained the notion that when more restaurants are opened,
more customers would be served, increasing revenues that will be recognized throughout the
board. This aggressive expansion strategy has been successful from the start, in both domestic
and international markets. To expand quickly, boost sales, and maintain its position as the market
leader, the company has always adhered to four key principles. McDonald's has not only become
the global leader, but has also revolutionized eating habits by utilizing its tremendous cash flow,
brand strength, real estate, and client spending patterns. While the methods of quick development
are not the main theme of this essay, changing the way people eat globally is a crucial issue that
will also be covered later on.

VI. Implementation

The key to successful strategic planning is implementation. Even if plans and

strategies are well-made, they are useless without implementation. McDonald's requires the
implementation of new tactics. If the current chef and menu are altered, plans should be
followed properly, prices should be fair, and staff members and the chef should receive the
necessary training on how to interact with clients and coworkers in the kitchen. McDonald's
needs to execute HR techniques that are different from one another to manage staff behavior,
pay employees fairly, and provide incentives and awards after a fair appraisal system. Since
McDonald's is known for its spotless open kitchen, the management needs to take the
necessary steps and implement the necessary tactics for the cleaning personnel. a team that
implements all riles not.

VII. Recommendation

McDonald's needs to concentrate on its current global situation; their menu should be
improved in terms of quality, taste, and quantity of products or items. This is because the
food industry is constantly changing and there are an increasing number of restaurants and
food items available. There are better food options than McDonald's from the consumer's
perspective, but the menu and prices need to be improved. McDonald's should also introduce
better food options than its rivals, such as a variety of fries, burgers, and sandwiches. Modern
consumers are highly aware of all aspects of food; thus, it is important to develop persuasive
techniques and provide people with wholesome, wholesome food.

References

https://l.facebook.com/l.php?u=https%3A%2F%2Fwww.mcdonalds.com.ph%2Four-story
%3Ffbclid%3DIwAR0OxUtsPpMaVTD-
E4F4lsmsYCjiMGtxWVFnHSqZnnCfuiILn7VC3shBSqw&h=AT1hwrLYfy7B88WGeSWgBN6
mnwPGSLWQQ6Sei6uC79OCBbp5MG4v_VJVgDc-4-
QpmeTs_fR4yGPnvI8xDeRPgCBw8xQJYX7y8O0DoeoA8INYuIdZNUPbM7S6AgfGwTdQFc
zjHQ