International Business about fast food

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Chapters11and12assignment1.docx

Launching the McWrap

It is hard to believe, but McDonald’s is no longer the world’s largest fast food chain—at least measured by the number of restaurants. While McDonald’s still sells more than Subway ($25 billion versus $18 billion in 2015), McDonald’s seems to have lost momentum, with US sales slowing down noticeably. McDonald’s, of course, does not only compete with Subway, but also with the likes of Five Guys and Chipotle. In all three competitors, customers can see their food being prepared and feel that it is fresher and seemingly healthier. In the Fresh Wars, Subway has elevated its food preparers to become “sandwich artists.” Chipotle has bragged about its “food with integrity,” and released a short film critical of industrial farming.

In response, McDonald’s has unleashed the McWrap, a high-profile salvo in the Fresh Wars in an effort to grab customer attention. The two-year, nine-ingredient, focus-grouped efforts to fix McDonald’s freshness problem are an amazing case study of how a multinational changes its strategy, taps into its global organization, and leverages its knowledge—all under the pressures of cost reduction and local responsiveness. Dissecting what is behind the launch of McWrap, at least three things can be observed.

First, the idea to launch McWrap did not come from the United States. It came from three operations in Europe. Second, the attention that the McWrap idea attracted from the headquarters was driven by a strategic interest in search of fresher and healthier items to outcompete rivals in the Fresh Wars. Third, significant experimentation, learning, and innovation went into the process. McDonald’s menu innovation team undertook intense research and numerous experiments that ultimately took two years (2011–2013) to finish. The wrap’s name went through intense testing. In the first trial in Chicago, it was called the Grande Wrap. But, customers could not figure out what “grande” was. Then, the name Fresh Garden Wrap was tested in Orlando, and it flopped too. Eventually, McWrap was chosen.

In a leaked, internal memo obtained by the media, McDonald’s admitted that it was not even in the top ten of the Millennial Generation’s list of favorite restaurant chains. When asked to elaborate, a McDonald’s spokesperson noted: “We don’t think we have a problem with Millennials, but we want to remain relevant to all of our customers.” Whether McWrap will prove to be relevant to customers remains to be seen—or tasted.

https://news.mcdonalds.com/static-files/054a5ff4-0c4d-421e-9f35-73822c9cbf64

In at least one FULL-page double-spaced answer the following in an ESSAY format :

Why is McDonald’s no longer the largest fast food chain?

Why do you think they selected the healthy alternative?

How should McDonald’s approach the millennials- id in the US and Worldwide (the markets are different).

Why did the McWrap flop in the US and worldwide? Do you have any recommendations?