Transcription
1McDonaldsCHARTING MCDONALDS WAY FORWARDTO STEVE EASTERBROOKNANYANG CONSULTANCY
2Agenda1. Problem statement2. Recommendations3. Option Evaluation4. Customer value proposition5. Implementation6. KPI7. Timeline8. Financial analysis9. Risk10. Conclusion
3Problem StatementQuality controlOperationalcomplexity Complaints aboutinferior foodsources – vendorselling expiredmeat in China,disputes aboutAmericanpotatoes, etc. Complaints overcomplex menus byfranchisees Issue withemployee paystructure, and foodproductsLack of focus Mix of all daybreakfast, “CreateYour Taste” andmenu upgrades! What can McDonalds do to turnaround its image and its operations ?
4RecommendationGo back to basics Speed up customer service time Understand what customer wants; providea simplified menuFocus on qualitycontrols Rebrand image to showcase high qualityproducts and good standards Create/monitor quality control standardsfor vendorsCreate a sisterbrand to cater toevolving needs Create a sister brand – McHearts – to tapinto the health conscious markets! Refocusing on its core strengths, improving quality and catering to the healthconscious customer will ensure McDonalds to grow in the future
5Option AnalysisOption 1: Create a new brand tofocus on healthy options Branding would take time Utilize old goodwillFastQualityWhatMcDonaldsstands forConvenientCheapOption 2: Reduce the menu to onlyfocus on burgers Will lose share to competitors Customers becoming more healthconsciousOption 3: Refocus CVP and cater tothe health conscious customer
6CUSTOMER VALUE PROPOSITIONSERVICE SPEEDANDCONSISTENCYVALUE Service consistency through strongprocesses/training Service speedEx: Drive through lanes Synonymous with good quality products atreasonable prices
IMPLEMENTATION 1:REFOCUS OF CORE CVPDESIGN THINKINGTASK FORCE McDonalds is losing sight of customers wants Next Steps: Creation of Design ThinkingTaskforce (Regional) Ex: Singapore Airlines Promoting InnovationProgramREDUCTION INSERVICECOMPLEXITY Harness insights from task force to specifyitems on menu Next Steps: Reduce menu items by 20% Speeding up of customer service by mobileordering options! Emphasis on gaining clarity on customer needs to improve service standards7
IMPLEMENTATION 2:QUALITY CONTROLPUBLICPERCEPTION OFQUALITYSTANDARDSSUPPLIER QUALITYCONTROL8 Next Steps: Social media led campaigns onMcDonalds best practices on food sourcingEx: KFC China Next Steps: 2 pronged approach:i) Establishment of stricter global qualitycontrol standardsii) Monitoring of suppliers throughrestructured geography-based markets! Rebuilding confidence in target consumers perception of McDonald’s food quality
IMPLEMENTATION 3:McHEARTS - A SISTER BRANDCREATION Next Steps: Create a brand under theMcDonalds nameEx: Yum BrandsSELECTION Next Steps: Select ideal franchises based onstrategic location 75-25 split based on demographicsSEGREGATION Next Steps: Segregate equipment, expertiseetc.9! Without sacrificing your CVP, we lock in our fans for both McDonalds and McHearts
10KEY PERFORMANCE INDICATORSREFOCUS OFCORE CVPQUALITY CONTROLMcHEARTS Customer satisfaction index (Surveys) Service times Facebook Likes, Follows, and Shares Percentage of farms and suppliers adhering tostandards Customer & franchisee satisfaction index(Surveys) Sales contribution! Without sacrificing your CVP, we lock in our fans for both classic and heart
RECOMMENDATION 1 elopmentLaunching*onlineRECOMMENDATION Brand*developmentRECOMMENDATION 3 01720182019
12Financials200Total EBITDACumulative1501005002016-50201720182019 550 people worldwide forthe task force 15 seconds saved by orderimplies 7 million hours peryear saved Quality control effort willlead to 0.3% increase insales Sales will be cannibalizedfor 75% of restaurants by 8%;sales will increase by 30% forthe remaining (25%)! IRR: 110%; Breakeven: 3 years! Only 30 million net outflow! Segmentation will generate 6% increase of net income
13Financials(m USD)!2016!2017!2018!2019!Setting-up Task Forces!-7!!!!Advertising creation!-12!!!!Setting-up quality control team!-1.5!-0.5!!!Yearly cost for QC team!!-10!-10!-11!Saving with burger making!!3.5!7!7!Sales increase due to quality control!!5!30!60!Segmentation!!-5!30!80!Total !165.5!
14RisksTypes of riskDefinitionLikelihoodImpactMitigationBrand riskCustomer don’taccept the newbrandMediumMedium CreateconsumerengagementplanEnvironment riskVendor complaintscontinue on foodqualityLowHigh Develop aglobal qualitycontrol Develop yourown farmsEconomic riskMcHeartsconsidered asexpensive byconsumersMediumMedium Design thinkingtask force tobreak productsby purchasingpower
15ConclusionGo back to basics Speed up customer service time Understand what customer wants; providea simplified menuFocus on qualitycontrols Rebrand image to showcase high qualityproduce and good standards Create/ monitor quality control standardsfor vendorsCreate a sisterbrand to cater toevolving needs Create a sister brand – McHearts – to tapinto the health conscious markets! Refocusing on its core strengths, improving quality and catering to the healthconscious customer will ensure McDonalds to grow in the future
16THANK YOU
Option Analysis Fast Cheap Convenient Quality What McDonalds stands for Option 1: Create a new brand to focus on healthy options Branding would take time Utilize old goodwill Option 2: Reduce the menu to only focus on burgers Will lose share to competitors Customers becoming more health conscious Option 3: Refocus CVP and cater to the health conscious customer 5 . CUSTOMER .File Size: 1MBPage Count: 16
