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McDonald''s has over many years built an operating strategy based on consistency and quality through a limited product range. Competitive forces have drawn the company into a much wider variety of foods and services in order to maintain growth. Now, new competitors threaten to beat McDonald''s at its own, original game. In addition, McDonald''s faces unprecedented challenges in its environmental policy. The case teaches approaches and dangers arising from flexibility, and the identification of capabilities that support different types of flexibility. The integration of environmental concerns with operations strategy is also addressed.