McDonald’s main problem is that it has largely ignored the changing tastes and ideals of its core

American customers – and thus backed itself into the stickiest of corners.

McDonald’s Core Competence and Competitive Advantages.

McDonald’s core competence and basis of their competitive advantage was to provide exceptional value
in a quick manner and their operations were set-up to produce food ahead of time, so when you got to
the drive-through it was all waiting for you. They mastered the science of quick and analysis efficient
service with Swiss clock precision. Another major advantage was the convenient location of stores all
over the United States.

The main problem

McDonald’s main problem was threefold. First, the company crassly ignored the changing tastes
and ideals of its core American customers making itself outdated and irrelevant to them (if not socially
irresponsible and repulsive due to issues ranging from humane management of animal food sources,
food quality and its impact on health, and hunger wages paid to poorly educated and trained
employees). As a consequence brand image was seriously damaged. Second, they failed to realize that
competitors were well positioned to satisfy customers needs. This applies particularly to millennials who
went to the competition which seemed to be more in tune with their health concerns and other issues
regarding fast food. In other words while McDonald’s mission, vision and became irrelevant to a large
sector of 21’st century consumers interests and needs, new competitors who were able to attend to
their needs entered the market. The eating habits of the core of American consumers changed before
McDonalds realized it really needed to change its menu and more important yet its mission, its vision, its
strategies and its structure.

Third, McDonald’s competitive advantage in getting food ready, almost anticipating customer
orders, was negated as costumers demanded innovation and individualisation. Costumers wanted a
more personalized experience including options which were difficult to meet ahead of time and
sometimes required additional storage and equipment . That is, costumer needs became very specific
rather than predictable and generic and highly standardized processes and technology developed by
McDonald through 60 years of service did not give them competitive advantage any longer. This
involved higher costs and longer waiting times, a lethal combination, for a firm whose core
competences and competitive advantage were based on their ability to deliver convenient food, at a
convenient cost, and at conveniently lightening fast speeds. In other words, speed and value,
McDonald’s core competences, just disappeared during the first decade after the turn of the century.

backed itself into the stickiest of corners.

The consumer is continuing to evolve away from McDonald’s’ core mission which was to provide
exceptional value in a quick manner. The operation was set up to produce food ahead of time, so when
you got to the drive-through it was all waiting for you. They had it down to a science.

They ignored it, but now it has finally reached Middle America, and Middle America has changed its
eating habits before McDonald’s has changed its menu.”
Jack Russo, an analyst at investment bank Edward Jones, said Easterbrook’s track record in the UK and
then growing McDonald’s in Europe at a faster pace than the US suggested the new man “can get things
turned around”. But he added: “They need to go further, they have to use more organic and natural
ingredients. These aren’t options any more, this is what millennials demand. Kids may still gravitate
there, but you’ve got to give the parents a reason to take them. The offering hasn’t changed much and
it’s got a little stale.”

McDonald's in crisis: can it fight off the Five Guys threat? Neate , R.
https://www.theguardian.com/business/2015/may/02/steve-easterbrook-mcdonalds-fast-food-big-
league-burgers-shake-shack