A Clear Strategic Vision; How McDonalds Reinvented Itself and Starbucks Learned from It

A Clear Strategic Vision; How McDonalds reinvented itself and Starbucks learned from it

McDonalds is one of the most recognized brands in the world, what began in the 1950's as Ray Kroc's vision of producing high quality food quickly and serving it in a fun environment has grown into a global industry leader. Although McDonalds had essentially cornered the fast food market by being the first of its kind, complacency and a focus on cost and profits had driven the one time industry leader to near disaster by the end of the 1990's. McDonalds had completely lost any sort of strategic vision and instead believed that the strength of brand recognition would continue to carry the company. The management of McDonalds began to focus on cost cutting and temporary promotions as well as more stores in hopes of improving profits; this focus ignored completely the need to improve food quality, customer service, and store ambiance ( Light, 2009). By 2001 this strategy had produced the first ever quarterly loss for McDonalds in its over 50 year history, something had to be done to revitalize and refocus the once storied industry leader (Light, 2009).

The process of revitalizing and refocusing the McDonalds brand began in 2002; the first step in that process would be to identify the issues that had led to the first quarterly loss in McDonald's history. The issues that were identified as the leading causes of the decline in the McDonald's brand were a focus on growth through opening new restaurants and acquisition, an incremental degradation of food, service, quality, and cleanliness, and most importantly a focus on cost management over brand management (Light, 2009). The bottom line is that McDonalds had become complacent; the management team was satisfied in the belief that the brand of McDonalds was enough to make up for the shortcomings in customer satisfaction and as Light points out the management of McDonalds had assumed a field of dreams mentality that "if you build it, they will come", so by building more stores they would attract more customers (Light, 2009). This strategy, as evident from the Quarterly loss, was not working and needed to be scraped and a completely new strategic vision developed and implemented in order to revitalize and refocus the McDonalds brand.

The new strategic vision for McDonalds, although very complex and detailed, really boiled down to one idea, "getting bigger by getting better" (Light, 2009). McDonalds adjusted their goal for new store openings in 2003 from 1300 new stores down to a little over 600 (Light, 2009). The new strategic vision also included a renewed focus on customer service and store cleanliness as well as improving overall food quality. The training program for new McDonald's employees was reworked with a focus on making new employees feel like part of the McDonalds family; the genesis for this change was the belief that happy employees provide better