From Big Mac to Big Brand

Transcription

1 From Big Mac to Big Brand McDonald s Porto Business School Team PBS Silvia Duarte Pedro Vilas Boas Rui Rosas Francisco Cudel

2 Challenge How to revamp McDonalds Sales?

3 We identified the following Key Issues 1 There is a paradigm shift in consumer perception Health Consumer associate the brand with health issues Price Low Cost Quality perception Service Fast Customization 2 Competition is growing in a fast pace More players in the market Competitors concerned with heathy food 3 Huge Brand with franchise business model Less flexibility to implement changes

4 Agenda Analysis Recommendations Financial Impacts Risks Implementation Plan

5 Analysis

6 Analysis Who are you? Leading Company in Fast Food Restaurants in the World You are operating in 5 continents Business structure based in owned and franchising Restaurants

7 Analysis Who are you? Leading Company in Fast Food Restaurants in the World You are operating in 5 continents Business structure based in owned and franchising Restaurants McDonalds is a global worldwide company

8 Analysis What do you stand for? You offer: Quality meals at low cost prices Quick and available service Company shows social responsibility (Ronald McDonald foundation) Company Thrives to offer customer satisfaction

9 Analysis What do you stand for? You offer: Quality meals at low cost prices Quick and available service Company shows social responsibility (Ronald McDonald foundation) Company Thrives to offer customer satisfaction Are you following your key values?

10 Analysis Let s take a quick look into your numbers US $ million $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $- Quarterly Sales Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Total Revenues Linear (Total Revenues)

11 Analysis Let s take a quick look into your numbers US $ million $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $- Quarterly Sales Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Total Revenues Linear (Total Revenues) What are the required actions to reverse the present situation?

12 Analysis From the farm to the customer Own Stores Drive in Raw Material Restaurants Customer Locally procured with national suppliers Franchising In store

13 You are facing issues that are reducing your brand name Analysis Sales values have been reducing constantly in 2014 McDonalds name is associated with obesity and other health issues (Fatty Food) There are new players in the market, and the competitors are growing Franchising issues Bloated menu

14 In order to tackle these issues you have a new turnaround strategy Analysis Restructuring Business for growth Returning Critical markets to sustainable revenue and income growth Building a differentiated customer experience Building brand trust

15 In order to tackle these issues you have a new turnaround strategy Analysis Markets Representativeness Foundational markets,100, 10% High-growth markets, 8, 10% US, 1, 40% International Lead Markets, 5, 40% The new model went from Geographically based to market based

16 That intends to improve on the following departments Analysis Create a nimble and fast organization Increase franchising in order to reduce costs and focus on local markets Increase franchising in order to reduce costs and focus on local markets Increase Transparency in the value chain

17 That intends to improve on the following departments Analysis Create a nimble and fast organization Increase franchising in order to reduce costs and focus on local markets Increase franchising in order to reduce costs and focus on local markets Increase Transparency in the value chain Is this stated turnaround enough? Are you focusing in your customers?

18 Analysis The industry is showing the following issues Political / Economical Social McDonalds is associated with western culture and may suffer from wars and embargos Customer is changing, being more demanding and aware, demanding health and quick available service Technology Global trend to have a omni channel approach to the service

19 Analysis There is an increased and Fierce competition Quality High end competitors McDonalds Low end competitors Price McDonalds is located in the middle of the pack and has not been able to increase brand and sales

20 Analysis There is an increased and Fierce competition 7% 6% 5% 4% 3% 2% 1% 0% Competitors Growth Taco Bell Chipotle Dunkin Donuts How about the McDonalds? Can you grow?

21 Analysis Your industry Rivalry Very High increased competitors strength Consumer power New entrants Very high they have a wide choice High Local stores with good costumer centric menus

22 Analysis What does the Future look like Costumer Health conscious Price sensitive Quality demand is increasing Need to understand where the taste is coming from Families, that have low income

23 Analysis What does the Future look like Costumer Health conscious Price sensitive Quality demand is increasing Need to understand where the taste is coming from You need to increase the customer experience

24 Analysis text S w Global leader in fast food restaurand Not costumer centric / obesity brand awareness o Capitalize on low cost high quality meals / become more costumer centric t Competition, healthier trends can undermine the brand name even further

25 Recommendations

26 Challenge How to revamp McDonalds Sales?

27 We identified the following Key Issues 1 There is a paradigm shift in consumer perception Heath Consumer associate the brand with health issues Price Low Cost Quality perception Service Fast Customization 2 Competition is growing in a fast pace More players in the market Competitors concerned with heathy food 2 Giant Brand with franchise business model More players in the markets Competitors concerned with

28 Recommendations Alternatives Analyzed Old and Beloved McDonald s Path to follow New Customized McDonald s

29 Recommendations Alternatives Analyzed Old and Beloved McDonald s Path to follow No significant customization Healthy food preparation and ingredients New Customized McDonald s Risk of misleading customer perception Higher price Slower service Franchise additional difficulties

30 Recommendations Alternatives Analyzed Old and Beloved McDonald s Path to follow No significant customization Healthy food preparation and ingredients New Customized McDonald s Risk of misleading customer perception Higher price Slower service Franchise additional difficulties

31 Recommendations Same Flavor but Healthier Product Price Place Promotion Less is More Low is High Good to Excellent Like Me

32 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT Reduced and Focused Menu

33 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT Reduced and Focused Menu HOW Social Media Campaign Customers Choice

34 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT Reduced and Focused Menu HOW Social Media Campaign Customers Choice IMPACT Customer Centric Approach Earn media Viral campaign Low Product prices Quicker Service InStore

35 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT High Quality Ingredients

36 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT High Quality Ingredients HOW Software for Suppliers Relationship Management Regular Control Visits Help and Follow Up of Suppliers Production Process Use of Local Products (vegetables )

37 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT High Quality Ingredients HOW IMPACT Software for Suppliers Relationship Management Regular Control Visits Help and Follow Up of Suppliers Production Process Use of Local Products (vegetables ) Close Relationship with Suppliers Improve Ingredients Quality

38 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT Franchise QHSE

39 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT Franchise QHSE HOW Software for Franchise Relationship Management Regular Control Visits Help and Follow Up of Franchises Process

40 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT Franchise QHSE HOW Software for Franchise Relationship Management Regular Control Visits Help and Follow Up of Franchises Process IMPACT Close Relationship with Franchises Homogenous Brand

41 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT Healthier Food

42 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT Healthier Food HOW Implement Healthy Cooking Techniques Fried Oil regular control (used oil to be recycled for fuel)

43 Recommendations Less is More PRODUCT PROMOTION PLACE PRICE WHAT Healthier Food HOW Implement Healthy Cooking Techniques Fried Oil regular control (used oil to be recycled for fuel) IMPACT Change in Customer Healthy perception about McDonalds

44 Recommendations Like Me PRODUCT PROMOTION PLACE PRICE WHAT Awareness about Obesity and Diabetes

45 Challenge Analysis Recommendations Financials Risks & Plan Like Me PRODUCT PROMOTION PLACE PRICE WHAT Awareness about Obesity and Diabetes HOW Foundation Campaigns Education events in schools Sponsorship of some marathons (color run )

46 Recommendations Like Me PRODUCT PROMOTION PLACE PRICE WHAT Awareness about Obesity and Diabetes HOW IMPACT Foundation Campaigns Education events in schools Sponsorship of some marathons (color run ) McDonald s as a social responsible brand

47 Recommendations Like Me PRODUCT PROMOTION PLACE PRICE WHAT Brand Awareness and Customer Convenience

48 Recommendations Like Me PRODUCT PROMOTION PLACE PRICE WHAT Brand Awareness and Customer Convenience HOW Mobile APP with Loyalty Card and Customer information for automatic invoicing Augmented reality in Packaging Free Instore Wi-Fi Earn media through social media campaign focusing on Ronald McDonald s Foundation

49 Like Me PRODUCT PROMOTION PLACE PRICE WHAT HOW Brand Awareness and Customer Convenience Mobile APP with Loyalty Card and Customer information for automatic invoicing Augmented reality in Packaging Free Instore Wi-Fi Earn media through social media campaign focusing on Ronald McDonald s Foundation IMPACT Increase Customer Convenience and Engagement Recommendations

50 Recommendations Good to Excellent PRODUCT PROMOTION PLACE PRICE WHAT Improve Customer Experience with the brand

51 Recommendations Good to Excellent PRODUCT PROMOTION PLACE PRICE WHAT HOW Improve Customer Experience with the brand Beacon Technology to communicate promotions Virtual table order to improve customer care Avoid queues Contact Less payment at table integrated with APP for automatic invoicing Virtual Playground for kids instore Family friendly Customer Satisfaction Query

52 Good to Excellent PRODUCT PROMOTION PLACE PRICE WHAT Improve Customer Experience with the brand HOW IMPACT Beacon Technology to communicate promotions Virtual table order to improve customer care Avoid queues Contact Less payment at table integrated with APP for automatic invoicing Virtual Playground for kids instore Family friendly Customer Satisfaction Query Increase client s turnover Recommendations

53 Recommendations Good to Excellent PRODUCT PROMOTION PLACE PRICE WHAT Employees Motivation

54 Recommendations Good to Excellent PRODUCT PROMOTION PLACE PRICE WHAT Employees Motivation HOW Training about new technology services available instore

55 Recommendations Good to Excellent PRODUCT PROMOTION PLACE PRICE WHAT Employees Motivation HOW Training about new technology services available instore IMPACT Employees Engagement with McDonald s

56 Recommendations Low is High PRODUCT PROMOTION PLACE PRICE WHAT Low Cost Meals

57 Recommendations Low is High PRODUCT PROMOTION PLACE PRICE WHAT HOW Low Cost Meals Reduced Menu Quick Service Blind Taste roadshow with Competitors Burgers to ensure customer quality perception

58 Recommendations Low is High PRODUCT PROMOTION PLACE PRICE WHAT HOW Low Cost Meals Reduced Menu Quick Service Blind Taste roadshow with Competitors Burgers to ensure customer quality perception IMPACT Increase number of customers

59 Challenge How to revamp McDonalds Sales?

60 We identified the following Key Issues 1 There is a paradigm shift in consumer perception Heath Consumer associate the brand with health issues Price Low Cost Quality perception Service Fast Customization 2 Competition is growing in a fast pace More players in the market Competitors concerned with heathy food 2 Giant Brand with franchise business model More players in the markets Competitors concerned with

61 Recommendations Same Flavor but Healthier Product Price Place Promotion Less is More Low is High Good to Excellent Like Me

62 Financial Impact

63 Financials Assumptions

64 Financials Investments

65 Financials Expenditures

66 Financials Expected Growth

67 Financials NPV Payback Period: 2,5Years

68 Risks

69 We identified the following risks Risk Reduced Menu presents less offer Employees afraid being fired- virtual improvements Ingredients quality level not ensured by suppliers Mitigation Ensure HIGH QUALITY with local ingredients to aligned with company values Employees training regarding new equipment and service SRM this allows effective control and definition of alternatives Risks & Plan impact probability

70 Implementation

71 Risks & Plan Implementation Plan Gant Chart USA MARKT High Grow markets Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Less is more Reduced Menu Costumer Choice CRM for suppliers development implementation Control Visits Suppliers local ingredients Franchise QHSE heathier food tecn. Like Me Foundation Campagnis Schools Events Loyalty card development implementation Augmented reality packin development prototipe implementation Good to Excel Virtual Playgounds Low is High Rodshows Evaluation points

72 Challenge How to revamp McDonalds Sales?

73 We identified the following Key Issues 1 There is a paradigm shift in consumer perception Health Consumer associate the brand with health issues Price Low Cost Quality perception Service Fast Customization 2 Competition is growing in a fast pace More players in the market Competitors concerned with heathy food 3 Huge Brand with franchise business model Less flexibility to implement changes

74 Recommendations Same Flavor but Healthier Product Price Place Promotion Less is More Low is High Good to Excellent Like Me