McDonald’s is the world’s leading fast-food chain restaurant brand. Before becoming the retail giant brand in the fast food industry, the company implemented a series of transformational and transitional steps relevant to customer preferences and market trends. Today, we’ll discuss McDonald’s change management case study; the internal and external factors causing the change, the role of the company’s leadership, and the result of implementing the changes.
Some of the main products and services of McDonald’s are as follows;
- Soft serves
- Soft drinks
- French fries
Historical Background of McDonald’s
- 1940 – Ray Kroc, Maurice McDonald, and Richard McDonald laid the foundation of the company on 15 May 1940
- 1955 – Ray Kroc acquired the retail chain brand from the McDonald’s brothers
- 1961 – Filed for the US trademark of the name McDonald’s with the description of “Drive-in Restaurant services”
- 1968 – The company received permission for a US trademark with the current logo
- 2021 – McDonald’s has a network of 40,000 franchise restaurants in more than 119 countries across the world; the restaurant brand is serving 69 million customers daily
Factors Caused McDonald’s To Change Management
Internal Factors Impacting McDonald’s
Some of the key internal factors that caused McDonald’s to change management are as follows;
McDonald’s was aware of the fact that employee engagement plays a significant role in the development of the company. In fact, it motivates them and boosts their morale and confidence level in the implementation of the change management process. The company’s management effectively communicates with its employees and offers them resources to accept the change.
II-Cultural Resistant to Change
The culture of McDonald’s focuses on uniformity and consistency, and it makes it difficult to implement the changes significantly. The company’s management has to deal with cultural resistance and promote a culture that focuses on innovation, creativity, and change.
McDonald’s follows a traditional business model and it is difficult for the company to maintain its pace relevant to the industry changes. The company had no other choice but to streamline its operations in order to become competitive and efficient.
The sales of McDonald’s was decreasing in certain markets, it allowed the company to re-analyze its company’s operations and business model.
External Factors Impacting McDonald’s
Some of the key external factors that caused McDonald’s to change management are as follows;
Technological development has amplified the taste and interests of customers, and it changed the way how they perceive and interact with hotels and restaurants. McDonald’s has got no other choice but to accept the latest technology like online ordering, mobile payment, and home delivery service.
The economic recession has decreased the purchasing power of people to a great extent, and it decreased McDonald’s sales significantly. The company has to change and adjust its strategies in order to maintain its position in the market.
The fast food industry has become highly competitive in recent years with the entrance of many new brands. They’re innovative, creative, and newer in the market and attracted the attention of customers. McDonald’s has to find a way to differentiate their products and services to attract the attention of customers.
The interests and preferences of consumer markets are changing and they want to diet and health-conscious products and services. It pushed the company to add fruits and vegetable-based products and services to its menu.
Successful Implementation of Changes by McDonald’s
Some of the top changes McDonald’s has implemented successfully in its restaurants in the McDonald’s change management case study are as follows;
Redesigning of Restaurant
In order to attract the attention of the younger audience, McDonald’s realized that the interior and exterior design of the store needs improvement. The chain restaurant brand invested a lot of resources in the design and decoration of its stores, comprised of the following;
- Touchscreen ordering with interactive displays
- Comfortable seating arrangements
- Contemporary designs
- Table services to improve customer experience
McDonald’s realized the significance of tech development and accepted the digital transformational strategy. Some of the steps restaurant brand took towards digitalization are as follows;
- Online orders
- Mobile payments
- Mobile application
- Delivery service
- Self-serving kiosks
The food preferences of customers have shifted from fast-food to healthier diet food. It allowed the company to diversify its menu into various categories to target different types of customers. They have diversified the menu into the following categories;
- Breakfast all day long
- Grilled chicken sandwiches
Role of Leadership in McDonald’s Change Management Case Study
Steve Easterbrook performed the role of CEO of McDonald’s from 2015 to 2019. His leadership played a significant role in the implementation of changes, and he brought the following changes;
- Redesigning of the restaurants
- Digital transformation
- Menu diversification
- Improved performance
- High growth
The leadership of Easterbrook developed a culture that focuses on continuous improvement. Some of the key steps he took toward the development of continuous improvement culture are as follows;
- Making sure the commitment of employees to the change program
- Offering them resources to experiment with ideas for innovation
- Empowering employees
- Employee engagement
The focus of Easterbrook is on communicating effectively; making sure that the employees are making informed choices; getting their feedback, and making adjustments to the plans.
The leadership of Easterbrook played a significant role in the execution of the change plan. They created a strategic vision for the employees to execute the change plan effectively. In fact, they offer necessary support and guidelines to employees to make sure they have accepted the change.
Results of Implementing Changes
Better Financial Performance
Implementing digital transformation, redesigning, and decorating has helped the company to improve its financial performance. The better financial performance resulted in the form of following;
- Strengthening the company’s position in the fast-food industry
- Higher profitability
- Increased sales
Attracting New Customers
Diversifying the menu allowed McDonald’s to attract the attention of new customers and maintain the existing database of customers. Along with menu diversification, the restaurant brand launched an online platform and started an online order service; it helped the company to attract new customers.
Redecoration and redesigning gave a new look to the appearance of McDonald’s restaurants, it allowed the company to attract young and modern audiences. The successful implementation of changes helped the company to achieve financial growth and increase sales.
Improved Brand Image
Including healthy and organic food in the menu and launching an online platform helped the company to improve its brand perception in the minds of target customers. It has allowed the company to create a healthy brand image.
Better Customer Experience
Online ordering and home delivery services have amplified the customer experience and increased brand perception.
Conclusion: McDonald’s Change Management Case Study
After an in-depth study of McDoanld’s change management case study; we have realized that implementing changes relevant to the market trends helped the company to maintain its market position. If you are learning about McDonald’s implementation of changes, then you should keep in mind the abovementioned factors, changes, and role of leadership.
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