Question

McDonald's has been an American icon since its creation in the 1950's. One of the banes of modern corporations is the tendency to get too big and bloated. Newly hired MBA's come in with brilliant ideas for projects that get added. The new projects need to be managed, hence more staff are hired. Some of these projects don't pan out, but it's easier to shift people around than let them go. How have you seen McD's change over the past few years? How has their stock price been doing? Do you think they need to restructure?

Answer 1

Yes I totally agree that they need to restructure in order to save the company. There stock price has moved up from $95 to $175 during last 5 years. The company should undertake the following to turn around the firm:

1) They need to refranchise the restaurants over the period of time to increase the franchisee operated percentage. Also they need to cut on headcount at central level to save on staff costs.

2) There is a much need of implementing new ideas in the menu. Also the decision making and turnaround in ideas need to be quick and without any delay.

3) A lot has changed for McDonalds over the last five years. The competition in the market is intense. They need to capitalise on the brand name and also improve the quality of the food further.