McDonald’s CEO Plans to Pump New Life into the Brand

McDonald’s chief executive Steve Easterbrook will draw again analysts’ attention Monday when he is expected to provide a detailed view on his company’s strategies to revive the brand.

Analysts and investors are curious what else McDonald’s has in store besides its plans to hike wages and eliminate some items from its menus. Investor community will be “laser-focused” on every move of the company, analysts said.

Last week, McDonald’s announced that its CEO would make public the “initial steps of our turnaround plan” early in the morning and participate in conference calls with reporters and business experts later on.

Newly-appointed Easterbrook announced that he had high expectations for the future of his company and efforts to revive it. He also said that he was a change agent that would turn McDonald’s into a progressive and modern company by finding new ways to challenge conventional thinking in multiple areas.

Several analysts believe that Mr. Easterbrook will unveil a revamped version of his company’s 2003 “Plan to Win,” which led to a series of achievements that boosted the company’s performance as no other plan did before in its 60-year history.

Other analysts speculate that the new plan will focus on boosting efficiency such as cutting wait times, improving food quality and how people generally perceive the brand, as well as generating new strategies to hike shareholder value and raise profits.

Analysts also expect that the CEO would focus more on improving restaurant operations and less on restructuring the corporation. Some speculate that the new plan may introduce new technology in the restaurant, others believe that more appealing menu items will just do the trick such as the Buttermilk Crispy Chicken, which was rolled out earlier last month.

All in all, everybody wants to learn what CEO Easterbrook will say and to what extent he will say it. But since his nomination on March 1, Mr. Easterbrook made a series of similar announcements aimed at pumping new life into an aging company.

He said that the company would reduce antibiotic use in chicken in two years’ time, raise wages at its U.S. locations, introduce an all-day breakfast and monitor consumers’ response, roll out new beef and chicken burgers, eliminate menu items that don’t sell that great, and close about 700 locations worldwide, which is twice the initial plan.

Investors expressed their confidence in Mr. Easterbrook and his long-term strategies because they believe that new CEOs are sometimes “catalysts for positive change” and McDonald’s new CEO proved that he was also such catalyst.

McDonald’s 2003 Plan to Win was the work of three CEOs. The plan was triggered by the company’s first quarterly loss in its history. Back then, CEOs admitted that the restaurant focused more on opening new locations, rather than keeping an eye on the competition and improve the already existing ones.

They, however, managed to successfully implement the new plan over the course of 2003 and 2004, and in 2005 McDonald’s was financially back on track. The following years, despite global economic slowdown, its shares’ price quadrupled.

But since 2011, McDonald’s shares fell more than 2 percent. Last year, U.S. sales also slipped 2.6 percent, while it Q1 profit sank about 32 percent.

Image Source: Telegraph