Question

Please Number Your Answers 1. McDonalds in the early Kroc years. a. What was the value proposition offered by McDonalds? What brought customers (repeatedly) in the door? b. What did the SWOT analysis look like at this time? 2. McDonalds in the Skinner years (c, 2003) a. Had the value proposition changed? b. How does a SWOT analysis look different? c. What do those changes suggest about the need to adapt? 3. McDonalds (2017) a. How does a SWOT analysis look different? b. What do those changes suggest about the needing to constantly challenge your value propositions for your targeted markets?

Answer 1

1. McDonald's in the early Kroc years.

Kroc started the franchise and promoting a standardized burger chain in 1954 where we agreed to handle the franchise operations of 1956 Kroc set up a subsidiary, the Franchise Realty Corporation which could for 25 years lease and rent it to the franchisees and save a cost of an increase in real estate prices. The biggest profit of Mcdonalds even today is it owns all its outlets.

Kroc in 1961 launched a training program for creating a set standard for all its franchisees. There, the experiences people from the trade trained the franchisees and the operators in the methods of running a successful McDonald's and built in them Kroc's values Quality, Service, Cleanliness, and Value."

In 1971 he bout out the McDonald brand name for $2.7 million as it was a source of continuous irritation with their intervention and not adhering to McDonald's standards.

1963 started advertising across the nation and saw an increase in sales and the franchise network grow and also the introduction of the legendary figure Ronald McDonald, in 1967 spent $2.3 million in advertising to maintain a uniform image of the brand, it was 1% of its total revenue.

1965, 710 McDonalds, spread through 44 states $ 171 million in sales went public on April 15.

1970’S had a revenue of $ 12 BILLION

1972 one store for 90,000 Americans and in 1977 started the European stores in all the capital cities and started by opening its 3000th store in London.

He officially hung his boots in 1968.

a. What was the value proposition offered by McDonald's? What brought customers (repeatedly) in the door?

The value proposition was as follows:

• Good burger and food at a competitive price
• Standardized product and services
• Quick and efficient services
• Limited menu with an identical taste

b. What did the SWOT analysis look like at this time?

Strength’s	Weakness
Standardization Good value for money Easily available in many locations	Limited Menu No room for innovation Customized variations not available.
Opportunities	Threats
To expand market share Potentially for exponential international growth	New entrants Local restaurants Big giants

2. McDonald's in the Skinner years (c, 2003)

Mr. Skinner took over the Helm of the affairs in 2003, he had already been 3 decades plus started working as a management trainee in 1971 with the company and saw his job as maintaining leadership of the brand and maintain existing strategy and vision.

His main achievement as his core strength international strategy for McDonald's, he also reworked the menu to add products suitable to the region or the country. He also ensured the distance between two franchisees was maintained to ensure equal business opportunity. His proposition was focusing on adding value and giving better returns to the shareholders. The international market grew voluminously under his leadership.

a. Had the value proposition changed?

The value position of maintaining standardization was same, and value for money also but the menu were revamped and many new local preferred products added to handle competition. Further adding value to product and services was the keyword.

b. How does a SWOT analysis look different?

Strength’s	Weakness
Standardization Easily available in many locations Good clean product and efficient service	Expanded menu but limited No room for innovation The competition offers better options Expensive menu
Opportunities	Threats
To expand market share Potentially for exponential international growth	New entrants Local restaurants Big giants

c. What do those changes suggest about the need to adapt?

The organization needs to revamp their strategy as follows:

• New look for their outlets
• Can consider setting up value-added outlets as they already have an infrastructure
• Product and services can be reinvented and relooked at with a new concept

3. McDonald's (2017)

They have made changes in menu and added a breakfast option in 2015, they saw a stagnation in sales. Under the leadership of Steve Easter brook they have:

• Worked at winning back customers
• Added value by giving better customer experience
• Changes in the menu to give more variety and better taste.

2017 has seen an increase in sales by 5.4% in some stores across the US.

a. How does a SWOT analysis look different?

Strength’s	Weakness
Standardization Good value for money Easily available in many locations Variety in the menu to match the local needs Clean and standard product	Same format banking on boring No room for innovation Too standardized
Opportunities	Threats
To expand market share Potentially for exponential international growth Changes in menu Need to add more value-added chains	The New entrants Local restaurants Big giants

b. What do those changes suggest about the needing to constantly challenge your value propositions for your targeted markets?

The need to add variety and give options to customers is critical to the survival of the brand. The McDonalds burger may be still liked but the market needs new innovation and a new look to the brand which is almost 70 years old.