POWERPOINT

C5: DEFINE THE CHALLENGES OR PROBLEM AS INDICATED IN THE CASE

 Changing Consumer Preferences: Shifts in consumer preferences, such as an

increase in the demand for healthier food options or a preference for fresh ingredients.

 Poor Labor Management: Fast food chains frequently have a large workforce, so
managing and training staff can be very difficult. McDonald’s operational challenge
arises from labor shortages, high turnover rates, and high expectation of customer
service.

 Weak Brand Image: Due to growing concern on obesity in the US, McDonald's and
other fast-food chains has been marked as the cause of an unhealthy eating lifestyle.

 Old Aging Outlets: The outdated and worn-out aesthetics of the outlets creates
negative first impression for customers and leads to a decline in customer interest.

C7: CONCLUSION

It is recommended that McDonalds should keep a close eye on market trends, consumer
preferences, and rival companies' products. Making business decisions with the support of data
analysis and data collection can help identify new opportunities. Lastly, McDonald's should also
prioritize offering outstanding customer service and enhancing the overall dining experience.
This can be accomplished by having courteous and well-trained employees, hygienic
restaurants, and effective ordering and delivery systems.
 FINAL EXAM PAPER

C4: DEFINE THE CHALLENGES OR PROBLEM AS INDICATED IN THE CASE

Changing Consumer Preferences

Over 14,000 of 35,000 McDonald's restaurants face many challenges, the majority of
which are franchised. It has significantly lost ground with customers, particularly Millennials. Due
to the shifting consumer preference, McDonald’s suffers from its declining effects, and
consumers prefer fast-casual chains with customized ordering options and fresh ingredients.
Therefore, McDonald’s responds to the shift in consumer preferences for fresher beef and a
variety of toppings by introducing two new Big Mac variations. McDonald’s has also changed a
few of its ingredients, including the removal of high fructose corn syrup from its buns, the
substitution of margarine for real butter, and the use of healthy and stress-free chicken and
eggs. However, as they expanded their menu, the price went up, and the preparation time
increased. This compelled McDonald’s to increase the prices of many of its goods.

Poor Labor Management

In addition, McDonald’s faced more issues because of the tighter labor market when
McDonald’s Headquarters stopped rating franchises for their cleanliness, speed, and service.
Due to its rapid expansion, McDonald's had seen a decline in quality performance. As it
struggled to find new hires, McDonald’s started to scale back on training, which caused a sharp
decline in the skills of its workforce. Surveys indicated that McDonald’s was in serious trouble
because of its declining service and quality. The essential elements of dependable fast, and
friendly service and an overall enjoyable experience for the whole family were frequently
neglected by McDonald’s.

Weak Brand Image

The growing concerns about obesity in the US also had an impact on McDonald's brand
image. Due to the high-fat content of most of their products, McDonald's brand image has been
marked as the cause of an unhealthy eating lifestyle. As a result, McDonald's phased out the
supersizing option and started to remove the artery-clogging trans fatty acid from the oil used to
cook French fries, and 15% reduced the sodium content of all its products. Additionally,
McDonald's made an effort to offer vegetable salads and gradually phased out the caramel
dipping sauce in favor of apple slices in their meals. The addition of fruits and vegetables has
increased the firm's operating costs, though, as their perishable nature makes shipping and
storing them more expensive.

Old Aging Outlets

McDonald's also considered renovating their aging outlets to boost the company's
dropping sales. The company is probably going to fall behind other savvier fast-food restaurants
if they don't make any changes to their decor. Thus, Jim Skinner collaborated with the
franchisees to improve the appearance and atmosphere of many of McDonald's outdated
stores. More than 80% of McDonald's outlets are now in the hands of franchisees and other
affiliates because of the McDonald's turnaround strategy. McDonald's decided to renovate or re-
image each of its locations globally to be seen as a lifestyle brand rather than just a place to get
a burger. McDonald's did this because they believed that people eat with their eyes first.
 C7: CONCLUSION

McDonald's pushed its brand in a variety of directions, thereby maximizing its brand
value to appeal everyone. McDonald's tried to reach out to various customer segment at various
times of the day with various products as their solution to declining sales. The company did
everything they can to revive their sales such as innovating their menu by introducing new and
appealing items to attract customers and to cater local tastes and cultural preferences. It is good
that McDonald’s also develop effective marketing campaigns that resonate with the target
audience, and they embrace technological advancement by adding modern features in their
newly refurbished outlets to enhance convenience and accessibility.

Fast food businesses face intense competition, and new competitors frequently enter the
market. According to the industry experts, the ability of the McDonald's to compete with rival
burger chains may determine its long-term success. Nonetheless, the most significant issue is
that it is unclear how far McDonald's can expand its brand while keeping all its locations under
the iconic golden arches.

It is recommended that McDonalds should keep a close eye on market trends, consumer
preferences, and rival companies' products. Making business decisions with the support of data
analysis and data collection can help identify new opportunities. Lastly, McDonald's should also
prioritize offering outstanding customer service and enhancing the overall dining experience.
This can be accomplished by having courteous and well-trained employees, hygienic
restaurants, and effective ordering and delivery systems.