The fast food chain has decided to focus more on sales in China by carrying out new steps to attract customers.
McDonald’s Corporation has been trying fight back the trillions of questions and concerns being thrown over on it following the difficulties it has so far faced on the stock index. The reasons that emerged on the surface for the falling share price were mostly driven by lack of proper management and ideas that failed to be far sighted. Furthermore, the fast food company has been looking towards picking it up and coming out of the difficulties all together. The new CEO of the firm, Steve Easterbrook, has also managed to bring about some of the most needed changes in the management that have suddenly made the analysts and equity firms bullish about the future of the company.McDonald’s restaurants have previously been following all the incorrect steps to bring changes in the management but with Easterbrook’s new turnaround plan, things seem to be moving in the right direction. There has been much discussion about where the firm should take its menu and most of the things it has been using have turned out to be the things the customers do not wish to use anymore. The food industry has been moving at quite a fast speed and the competition in the market has increased by a mile which has put the famous fast food chain in a problem.McDonald’s business is also looking towards establishing it all over again in China and Japan as it believes it can attract a massive number of customers from that region like it has before it started getting defamed.Now to bring the attention of Chinese customers to the food chain, McDonald’s has planned to launch a new payment service for the customers who will be easily able to pay for their food online. This will help them to not only save time, but the whole ordering process will be becoming much easier on the whole.As per the reports, McDonald’s has also launched a new machine in Shanghai which gives the customers a chance to build their own burger by following the steps on the machine. This strategy has been signed in by the food company in order to attract all the tech savvy people in the Asian countries who seem to be carrying out all their tasks through digital media.Moreover, it should also be noted down that the idea of mobile payment is bringing about an improved business from the Asian countries where this has recently taken its toll.
McDonald's wishes to sell its Taiwan-based stores to franchise operators.
McDonald’s Corporation recently announced that the company wishes to sell almost 413 stores situated in Taiwan. These stores will be given to franchise operators in an attempt to minimize costs across the globe. McDonald’s stocks experienced a decline in the day’s trade along with the stock falling by 0.5 percent during the day’s trade and a further 0.14 percent during the after-hours.McDonald’s restaurant has been stumbling since a long span of time now when it comes to their global operations along with coping with the restructuring plan earlier in FY15. Previously, the company also announced that they will reduce their stores in the United States which clearly indicates that the company is not doing well in their home ground. The company has vowed to minimize the number of old stores therefore when comparing the new stores they have opened the ratio is relatively low. In the United States itself the company has almost 14,333 outlets in the region.The company had plans to undergo a restructuring program by the start of the fiscal year of 2015 where it decided to shut down almost 350 of its store in the Chinese American and Japanese market during the first quarter. Steve Easterbrook, who is the new chief executive officer of the firm is all keen to increase the profitability of the company since the time he has taken charge. So his plan to actually sell the company self-owned stores to franchises is actually a big achievement and a well thought out initiative.The company has been present in the Taiwanese market for more than three decades now where it currently has more than 20,000 employees on board on full time and part time in the region.This announcement by the company is extremely meaningful for the stakeholders who are extremely keen to know more about the details regarding the revamp plans as announced by Mr. Easterbrook earlier. The company has been dealing with several problems in the United States market which shows that competition has increased tremendously. The company’s sales trajectory for the first trimestral declined by 2.3 per cent across the globe but in United States, the sales declined by 2.6 percent.In an interview to Reuters, the spokesperson of the firm recently made a comment that they are actually in quest of a development license in the region. This initiative by them will help to make decisions at a relatively faster pace in the region ensuring growth in the long run.
McDonald's can redeem itself believes Deutsche Bank
According to a recent report published by Deutsche Bank, the company which does coverage on various firms recently targeted the fast-food giant, McDonald's Corporation. The bank is relatively optimistic about the future of this company and has thus given McDonald's stocks a “Buy” rating along with an average price target of $120. Moreover, they also believe that the company has a potential to experience a 24 percent upside considering the current trading price.
Karen Short, a renowned analyst stated that several investor’s believe that McDonald’s restaurant “arches are broken” but according to the company, the fast food behemoth “remains an iconic global and fixable brand.” Mr. Karen believes that the company has immense potential to redeem its position under the able leadership of the new chief executive officer Mr. Steve Easterbrook.
According to consensus, the company has been missing on earnings estimates since the past five consecutive quarters where their sales have been staggering at a steady pace. However, the strategy implemented by Mr. Easterbrook is extremely effective and can change the game for them once again. According to the analysts, the company is embracing a cultural change that allows them to question the “once off-limit strategies” with the power to get rid of the sacred goat ideology. This is a major breakthrough which will help the company to innovate and come up with new technologies that can result in efficiency.
Recently Mr, Steve Easterbrook came up with a video that dealt with the company’s upcoming plans in which he wishes to cut down on the long tiers of management and start focusing on ways that can drive customer satisfaction. He understands that the company has been dealing with several shortcomings and his agenda is to “We need to execute fewer things better,” as mentioned in the video.
Apart from this the company has plans to franchise almost 3500 outlets by F18. So once they are successful in doing so than 90% of the total outlets will be franchised. The Deutsche Bank analyst considers this a well thought out plan by Mr. Steve Easterbrook that will help the shareholders to a raise in capital return,
Despite Deutsche Bank is extremely positive about McDonald’s performance but even then the company needs to take several major steps to fight back. Mr. Easterbrook has taken several initiatives that have proved fruitful, but a lot more needs to be done so that they can attain stability once again.
McDonald's continues to stumble in Q1 despite efforts to improve.
With many companies revealing their earnings report for the first quarter, McDonald Corporation has also unveiled their report. With this report of their performance in the first quarter, things are already a mess for them.According to the report, the company experienced a massive decline in sales during the first quarter of fiscal year of 2015. The company’s business is stumbling since more United States consumers are opting out of fast food franchises and going towards healthier alternatives. The company’s performance has been disappointing in United States, Asia and Europe. McDonald’s restaurant during this tenure has taken several initiatives to revive it, but it seems like things are not willing to go their way.The company’s problems are not short term but date back to the past few quarters where their performance has continuously slacked. MCD has tried to accustom itself to the changes in consumer demand but have not really succeeding in doing something concrete. They also came up with a complex menu, but companies like Chipotle Mexican Grill and Panera Bread tend to take the limelight away from them.Wall Street had earlier predicted that McDonald’s stock performance would stagger by 1.8 per cent. However, the company also crossed that benchmark where now its stocks have gone down by 2.3%.The company initiated several competitions and incentives based policies so that they could gain more diners but despite efforts sales fell by 2.6 per cent within United States. Moreover, the largest market for McDonald’s resides in Europe, but even then they struggled to a great extent in Russia and France. However, the company believes that the weak economy is the prime reason behind their stumbling in United Kingdom.Apart from this, the food safety scare that occurred in Asia and Middle East resulted in a drop in sales by 8.3 per cent. Thus, all in all, the sales record has resulted in the operating profit margins of the company to compound to 28 percent for Q1.The company itself believes that this will continue for them in the months ahead as it expects sales to decline even further.Mr. Steve Easterbrook, the new chief executive officer of McDonald’s has taken several initiates that will help them pave their way to glory. This includes a comparatively simplified menu, the company put an end to stores that were not doing well and also worked on increasing the wages of employees. However, the efforts taken seem all in vain. “McDonald’s management team is keenly focused on acting more quickly to better address today’s consumer needs, expectations and the competitive marketplace,” mentioned Easterbrook in a statement.
