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Published by: IBS Center for Management Research
Published in: 2003

Abstract

In the late 1990s and early 2000s, McDonald''s, the leader in the fast food industry saw its performance deteriorating and in January 2003, announced its first quarterly loss since it went public in 1965. The case discusses the reasons for McDonald''s'' poor performance in the late 1990s and early 2000s. The case starts with a description of the growth of McDonald''s over the years and the challenges it faced due to changes in the external environment. It then goes on to explain the reasons for poor performance of McDonald''s, which ultimately led to the resignation of CEO Greenberg and the re-entry of Cantalupo, who had vast experience with McDonald''s, as the new CEO. The case also explains the changes initiated by Cantalupo to restore McDonald''s to its glorious days. From the case, students are expected to: (1) understand the influence of both internal and external environments on the continued performance and financial success of a firm; (2) gain insights that rapid growth does not guarantee increasing margins or profits; (3) understand the relationship between growth and market opportunities; (4) understand the dynamics of the fast food industry and the industry success factors; and (5) discuss the role played by a CEO in formulating strategies and guiding a firm towards a goal. The case is intended for MBA/PGDBA students as part of their strategic management and business strategy curriculum.
Location:
Industry:
Size:
Large
Other setting(s):
1961-2003

About

Abstract

In the late 1990s and early 2000s, McDonald''s, the leader in the fast food industry saw its performance deteriorating and in January 2003, announced its first quarterly loss since it went public in 1965. The case discusses the reasons for McDonald''s'' poor performance in the late 1990s and early 2000s. The case starts with a description of the growth of McDonald''s over the years and the challenges it faced due to changes in the external environment. It then goes on to explain the reasons for poor performance of McDonald''s, which ultimately led to the resignation of CEO Greenberg and the re-entry of Cantalupo, who had vast experience with McDonald''s, as the new CEO. The case also explains the changes initiated by Cantalupo to restore McDonald''s to its glorious days. From the case, students are expected to: (1) understand the influence of both internal and external environments on the continued performance and financial success of a firm; (2) gain insights that rapid growth does not guarantee increasing margins or profits; (3) understand the relationship between growth and market opportunities; (4) understand the dynamics of the fast food industry and the industry success factors; and (5) discuss the role played by a CEO in formulating strategies and guiding a firm towards a goal. The case is intended for MBA/PGDBA students as part of their strategic management and business strategy curriculum.

Settings

Location:
Industry:
Size:
Large
Other setting(s):
1961-2003

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