Turning Around a Big Brand

Not everything is golden under the Golden Arches.

McDonald’s sales fell nearly $400 million in the first quarter of 2015 and the company announced it was closing about 350 poorly performing stores in Japan, the U.S., and China. The franchise has suffered a series of struggles lately as millennials’ tastes change, competition remains fierce and menu innovation seems to have hit a slump.

When looking at successful brands going through a rough patch, there are a couple of easily identifiable characteristics: relevancy and a general disconnect between corporate and the franchisee.

In terms of McDonald’s relevancy, the fast-casual concept has changed since the inception of the brand. What was once viewed as a vastly unhealthy alternative to cooking has been shifting with concepts like Pita Pit and Smoothie King introducing meal options that don’t break the bank or the calorie count. McDonald’s adapted by adding healthier options to the menu, attempting to re-establish the brand in order to appeal to a broader audience.

Reviving a struggling business when brand validation and existing customers have already been established eliminates a portion of the problem. The rest is about revamping.

Most recently, McDonald’s recognized that profitability was struggling. Somewhere down the line there was probably miscommunication between the corporate team and franchisees on how the business model should be run. The company focused on trimming the fat from its oversaturated markets in order to focus attention on those that were maintaining a steady stream of revenue, identifying the problem and eliminating it at the source.

Now reshaping their image in the mind of investors has been the next challenge.

McDonald’s has started focusing on enhancing their strengths by adding all-day breakfast items and marketing fresher ingredients, a great approach for existing customers and a point of differentiation from many other chains in the same category. McDonald’s also recently released the chicken burger in over 200 locations in the Tampa Bay, Florida, area, creating buzz and increasing share prices.

With consistent innovations that remain relevant to both investors and customers, McDonald’s is making waves on a turnaround that has the opportunity to positively impact the health and wellness of their customers and the bank accounts of investors.