McDonald’s Strategies For Success Case Study Example
Type of paper: Case Study
Topic: Leadership, Management, Business, Organization, Model, Skills, Customers, Food
What are some measurable factors of the success of Jim Cantalupo’s turnaround plan? Explain the measurable factors in detail.
Jim Cantalupo was the one who introduced a “Plan to win” strategy in McDonald’s. The strategy was based on the concept of enhancing the existing menu, extension of hours and modification of store interiors. Some of the measurable factors of the success of Jim Cantalupo’s turnaround plan are as mentioned below:
Cantalupo worked on three important basics of his three year turnaround plan, that is, better food, quick services and cleaner restaurants.
McDonald’s had been rallying on ‘Franchisee model’ right from the beginning. When other businesses were dropping down, rather than pushing for new franchises, Cantalupo focused on re-inventing the present franchises and improving the existing services.
As the trend for fast food industry was changing quickly, Cantalupo focused on customer satisfaction by speeding up the customer service and maintaining cleaner restaurants.
The secret mantra of McDonald’s marketing and branding strategy was its ‘Global product marketing’ effort. Despite its varied geographical presence, McDonald’s as a product had retained its original identity while catering to local tastes and values.
McDonald’s continuously focused on ‘Innovations’ and adapted them globally. Every year, McDonald brings about a new flavours and dishes, new tastes or adds new items to its menu list.
‘Kids’ & ‘Teenagers’ are its largest target audience, therefore McDonald’s often invents a product keeping its target group in mind.
As compared to other fast food chains, McDonald’s has maintained its quality standards at an affordable price which not only attracts its target group but also makes it one of the most preferred family restaurant for people across the world.
McDonald’s ensures that it re-invents its marketing campaigns every year in order to reflect the changing customer needs and demands. The food chain respects the cultural differences of its customers and therefore customizes its branding strategy as per the region & local preferences.
McDonald’s often adds seasonal variations into its menu list to attract more customers. For example: In Japan, “The Teri Tama Burger” is served during spring and “The Tsukimi Burger” is served in the autumn season. In India, “Mango milkshakes” are added in the menu during summer season to attract footfalls.
The biggest factor that measures that success of James Cantalupo’s turnaround plan is the consistent increase in sales. As per the 2012 annual report of McDonald’s (http://www.aboutmcdonalds.com/mcd/investors/annual_reports.html) , the fast food chain’s total franchise sales increased 3% from the previous year
What are some of the critical components of a competency model for a new CEO for the McDonald’s corporation?
Although James Cantalupo’s turnaround strategy for McDonald’s was beginning to reap rich dividends, there was a setback for the organization as Cantalupo suddenly died of a heart attack in 2004. In a sudden act, Charlie Bell was appointed as the new CEO of McDonald’s corporation. He was previously serving as a Chief Operating Officer. The critical components of a competency model for a new CEO for the McDonald’s Corporation are as mentioned below:
Capability to identify, foster and develop local talent. It was important for Charlie Bell to identify the local aspirations and local talent. If McDonald’s could succeed in giving employment to local people, it could receive a tremendous amount of customer goodwill.
Management development programs such as MBO should be introduced to ensure that the right skill-sets are identified and inculcated right from the beginning. As per Intagliata, Crosby and Kulick (2006), it was important for the new CEO of McDonald’s corporation to enhance its existing talent management system in order to support the company’s vertical and horizontal growth.
Various ‘Leadership Development Programs’ such as workshops, seminars and expert cooking sessions had to be introduced in order to train the successors both locally and globally.
4. Business model, goals and objectives should be communicated and made an important part of competency model. As per Kotler (2011), marketing strategy addresses the why and what of marketing activities. It is imperative the McDonald’s include this component in its competency model.
It is extremely important that the new CEO should be trained to think strategically as per the organization’s original strategic goal. If there is any misalignment between the past and current leadership, then there would be some major ideological changes in the functioning of the food chain.
Team building, motivation, talent management, crisis management has to be an integral part of new CEO’s competency model.
New CEO should work with a mind-set of - Think Globally, act locally. He needs to understand that the food chain needs to maintain its global brand name while at the same time cater to the local tastes, preferences and choices.
New CEO should be a strong leader with excellent communication and an ability to comprehend challenges. He must practise ‘value based’ leadership which is based on creating value and a win- win situation for its external as well as internal stakeholders and customers.
The new leader has to ensure that takes necessary cues and lessons from his successor and be able to take on the necessary action to bring maximum profit to the organization. This could be anything from introducing new service offerings to modification of existing menu as per the customer preference.
Finally, the competency model for the new CEO should focus on values such as integrity, discipline and commitment.
What did you learn from this case study to use it in your leadership role at your organization?
Planning is an extremely important step at every stage of leadership management. Without proper planning, there can be some serious repercussions for the food chain.
An organization should be able to identify its critical positions and should be able to take necessary steps to identify its successors. It is extremely important for any organization to have a back-up plan as the future is uncertain and there can be any kind of incident that can create a sudden need of change in leadership.
It is extremely vital for an organization to identify, retain & train its best talent to keep them prepared for the future leadership role. It is important that the company appoints a new leader from its existing set of employees. This would ensure that the new leader is already aware of the long term strategy and the organization’s expectations out of him remain clear and transparent.
The successor has to appropriately trained and educated keeping the new CEO competency model in mind. It is important to analyse and follow this competency model on a regular basis.
Various leadership development initiatives should be held from time to time in order to motivate more employees along with enhancing their leadership skills. This would ensure that there is less employee attrition and increased employee satisfaction.
A comprehensive and elaborate leadership development programme should be made an integral part of performance management system.
Employees who display ‘leadership’ skills should be rewarded both tangibly and intangibly. This activity would ensure that any suitable candidates who deserve leadership positions be identified and monitored on a regular basis.
An organization should be prepared for any kind of crisis and therefore it should have its successor as well as succession plan well in place along with the necessary documentation.
Various management development strategies should be reviewed in a timely manner in order to ensure that these activities are in parallel with the current management trends.
Finally, it is extremely important to evaluate the effectiveness of the ‘leadership/successor development’ program. For such a program, various in-house/outhouse agencies could be hired in order to measure and evaluate an organization’s leadership development plan.
KOTLER, P. (ed.) (2011). Marketing Management. Washington. Pearson.
McDonald’s (2015). [Online] http://www.aboutmcdonalds.com/mcd/investors/annual_reports.html [Accessed: 17th March 2015]
McDonald’s Corporation (2006). [Online] http://alexcelgroup.com/articles/Talent%20Management%202006.pdf [Accessed: 17th March 2015]
WSJ (2013) Debunking the Leadership Myth. [Online] 7th August, 2013. http://deloitte.wsj.com/cio/2013/08/07/leadership-debunking-the-superhero-myth/ [Accessed: 17th March 2015]