MC DONALDS CASE STUDY:
Worldwide, the McDonald’s Corporation has more than 36 000 restaurants in 119 countries. Every day, the company has more than 69 million customers globally coming through its doors or drivethroughs. While McDonald’s restaurants around the world follow a set of basic rules, each country is given a good amount of freedom to innovate. McDonald’s opened its first Australian restaurant in 1971. From there, it has grown rapidly to where it has more than 90 000 employees working at more than 900 McDonald’s restaurants and cafes serving more than 1.7 million customers every day with annual sales of more than $4 billion. While some of the restaurants and cafes are company run, nearly 80 per cent are franchise businesses operated by individual business men and women. On average, a McDonald’s restaurant has about 100 employees. The Australian business is among the most successful arms of the Chicago-based fast-food empire. Australia has long been acknowledged as a leader within the McDonald’s corporation. For example, the McCafes, launched in Melbourne’s Swanston Street in 1993, have been adopted in other parts of the world. McDonald’s Australia has also been a leader in the introduction of nutritional labelling – a move that has now been copied by McDonald’s operations around the world.
McDonald’s Australia’s Chief Executive Officer is Andrew Gregory who stepped into the position in 2014. Like so many other senior managers within the McDonald’s corporation, Gregory started working part-time for the company in 1992 as a teenage crew member cooking french-fries and serving customers. Initially, it was a way for him to earn some extra money while he was a student. However, a few years later, after graduating from university with an economics degree, he got a job as an accountant with the McDonald’s corporate team in Melbourne. This was the beginning of a rapidly developing career path that took in positions such as regional accountant for Victoria and restaurant development manager for the Southern Region of McDonald’s Australia.
In 2006 Gregory joined the Australian executive team and became the regional manager responsible for all aspects of McDonald’s business in Queensland and the Northern Territory. This included franchising, operations, advertising, marketing and sponsorship. In 2010 he moved to Tokyo where he took up an executive position in McDonald’s Japanese business, which is the company’s second largest operation after the United States. Here, he played a key role in leading the Japanese business out of the crisis it found itself in after the massive earthquake and tsunami that struck Japan in 2011. ‘We had about ten percent of the company’s restaurants in Japan closed for different reasons after the earthquake. We worked hard to re-open them’.
Having overseen most of the recovery in Japan, Gregory returned to Australia in 2012 where he took on the role of Chief Financial Officer and then Chief Executive Officer in April 2014. As the boss of McDonald’s Australia he is now responsible for marketing, public affairs, operations, supply chain and business planning. He has taken on a leadership role to inspire further development of McDonald’s Australia.
Andrew Gregory will need to navigate McDonald’s Australia through a challenging market environment with its ‘old’ competitors such as Dominos, KFC, Subway, Red Rooster and Pizza Hut, but also more recent entrants such as Guzman and Gomez, Oporto and Salsa’s Fresh Mex Grill, all of which are competing for the customer’s dollar. In the United States, McDonald’s has experienced a slump in
its market share and is keenly looking for new initiatives to help solve its problems. As the Australian arm of McDonald’s has been one of the main innovators within the global empire, Gregory’s challenges highlight how important it is for a large enterprise to become more agile and innovative. At McDonald’s Australia, there are signs that these challenges are being embraced, with Gregory stressing the importance of creating a more transparent and responsive dining experience.
However, transforming one of the world’s largest fast-food companies into a nimble operator that can quickly embrace new trends in a competitive market is not always an easy task. But McDonald’s is trying, having introduced the ‘create your taste’ experience in Australia, giving customers the opportunity to custom make their own burger using touchscreens and setting up ‘customer learning labs’ to try other new concepts. For example, its new store concept ‘The Corner’ could potentially pave the way for some drastic re-branding of McCafe outlets. The Corner looks more like an independent café with more gourmet-oriented offerings, personalised service, metal cutlery and a range of café-style hot beverages. According to Andrew Gregory, ‘McDonald’s is innovating and changing again to meet the needs of our customers. An important part of our new learning lab restaurants is that we take customers along the journey with us and get their feedback. We want to make sure Macca’s restaurants of the future are what Aussies ordered’. He also sees that there will be necessary changes in the working culture and how staff interact with customers as the company embarks on a $1 billion remodelling of its operations.
Source: Robbins, Bergman & Coulter 2018, Management, 8th edn, Pearson Australia, Melbourne, pp. 31-32.
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