McDonald’s – Management’s Initiatives During 4Q14



Management’s initiatives

McDonald’s (MCD) has been struggling to grow its revenue. To turn the situation around, management noted specific initiatives. We’ll discuss the initiatives in this part of the series.

Management forecasts that same-store sales will likely be negative during January. The forecast anticipates a shift in the Chinese New Year and a dampened perception in Japan—due to the meat supplier scandal. To learn more about the meat supplier scandal read Why McDonald’s took a big hit in China.

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Customer convenience

In a move to increase customer convenience, McDonald’s will roll out table service, self-order kiosks, and mobile ordering and payment facilities. McDonald’s believes its “Create Your Taste” platform will “lift sales of core classics.” This is management’s answer to change the way customers order their food at McDonald’s. It gives the customers more options. They have the ability to customize their orders.

Also, McDonald’s will offer a more localized menu to be more relevant. McDonald’s wants to appeal to its customers. According to management, the marketing efforts will also take shape around these strategies.

McDonald’s “Experience of the Future” initiative

Management is also focused on McDonald’s “Experience of the Future” initiative. It includes technological changes and remodeling restaurants. McDonald’s is also moving towards encouraging customers to purchase bundled orders. McDonald’s wants customers’ input on the quality of the ingredients that it uses in the US, Canada, and Australia. It’s also reviewing its menu pricing across categories to increase profitability.

Unlike restaurant companies that operate multiple brands—like Yum! Brands (YUM), Darden Restaurants (DRI), Brinker International (EAT), and Bloomin’ Brands (BLMN)—McDonald’s management believes that its single-brand operation gives it the needed focus to channel its energy and resources to create a more engaging brand.

The Consumer Discretionary Select Sector SPDR Fund (XLY) holds 3.9% of McDonald’s stocks.

In the next part of this series, we’ll look at management’s outlook for 2015.


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