Revive to survive
McDonald’s fast food group announced in January 2015 that Steve Easterbrook, its senior executive brand president and chief brand officer,
is to be the new chief executive of the ailing fast food chain. He has the task of returning the fast food giant to its former glory days.
Reportedly, McDonald’s saw a 15% drop in revenues in the past year.
Maybe this revenue hit is a result of both increased competition and the message that fast food has some downside health a effects;a message that may finally be getting some traction.
Improve efficiency and cut jobs!
Organisational changes reportedly will contribute to $US300 million ($A383 million) in cost-cutting targeted by McDonald’s. Without providing much detail, Easterbrook said “the cost-cutting will affect jobs”.
An interesting comment that perhaps speaks to the risks of cost down initiatives made in isolation was made by Mr Larry Light, who served as chief marketing officer of McDonald’s between 2002 and 2005 and now runs a brand consulting firm, he said Easterbrook offered little in the way of what matters to customers.
“Being more efficient, having less bureaucracy will buy you time, but will not buy you enduring success,” he said.
Unfortunately jobs are one of the first things that suffer under cost cutting initiatives with Light’s message that this alone will only buy you time, time to explore the opportunities and to innovate and change what you are doing.
Interestingly, one wonders if McDonald’s really does know what the customer really wants. Its new bold initiative of “build your own burger”, which was no doubt very expensive to implement and probably even more expensive to service, may have more than one purpose.
On the one hand it allows customers choice, on the other it may be an admission that McDonald’s wants to take on all comers but is not sure what the market really wants any more.
The big picture!
However, if one likes to dig deeper there may indeed be a hidden agenda with McDonald’s “build your burger” program.
This program will allow the collection of so called, “Big Data” as to the most preferred custom built burger. Armed with this information McDonald’s will be able to better understand what the market really wants and moreover the geographic profiles that various tastes dictate.
If this is the real reason, it’s a clever initiative and one wonders how long the
“build your burger” initiative will prevail. My guess, just as long as it takes to get the big data they need.
I applaud this initiative on the part of McDonald’s, it’s smart and will provide huge strategic market insights, insights that may lead to the innovations that will again set them straight.
What’s the message?
Never stop looking at the market and your customers, Innovate or perish.
By: Roger La Salle
Roger trains people in innovation, marketing and the new emerging art of Opportunity Capture. His creation, “Matrix Thinking”™ is used in organisations in more than 29 countries. For more information click here.