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Old McDonald's Lost its Charm?

Ever think a British executive would be appointed to lead one of the world’s – and America’s – biggest brands?  With the recent appointment of Steve Easterbrook as CEO, he certainly has his work cut out.

A quick trawl of the press coverage of this meal maker reveals just how dynamic (or turbulent?) it has been in the last quarter alone: “McDonald’s Tries Again with Upscale Burgers,” “McDonald’s Franchisees Express Frustration at Revamp Plans,” “McDonald’s to Ax More Underperforming Stores” according to the Wall Street Journal’s headlines.

The turnaround now needed by Mr. Easterbrook – which he apparently achieved with the McDonald’s UK stores – is not so cut-and-dried.  In some markets, he needs to rebuild the brand’s reputation, especially in Japan where the recent discovery by a customer of a human tooth in his burger has cost it significantly.  In more mature markets such as the United States, consumer literacy as regards healthy eating has improved while the brand’s perceptions haven’t kept pace.  What makes for a happy meal in one region is not a happy meal in all.

So how can this European CEO manage the local and the global, the British background and experience in a global company?

  • Improve operations.  Like its rival Burger King, further streamlining operations to leverage its economies of scale would help it manage its cost base.  No doubt procurement, store operations, IT centralisation amongst other shared services could go further still.
  • (Re)focus on the customer.  Leveraging the US trend for healthier meals while catering to those in emerging markets seeking the status associated with dining out may seem like conflicting pursuits, but in fact allowing for “freedom in a framework” by regional heads can achieve it.  The global/local dilemma is not new to McDonald’s or any other multinational corporation.  What makes the difference is great insights and good leadership to act on them.
  • Devolve power.  Over centralised decision-making necessarily translates into losing touch with what local consumers want.  Local sourcing and menu items already are in the company’s DNA – the McKorma in India, the McArabia in the Middle East – so allowing even more local innovations demonstrates responsiveness and gains customer loyalty.

While the heyday of mass-market American brands abroad may be over, there’s still plenty of money to be made for those that get it right.

What will make the difference for McDonald’s is good listening, localisation and long-term plans for reinventing happy meals.


This article was published on the Brand Republic website on 25th May 2015.

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