McDonald's unveils massive turnaround plan to revive business

PanARMENIAN.Net - McDonald's unveiled on Monday, May 4, its massive turnaround plan to revive business, according to Business Insider.

"Our recent performance has been poor. The numbers don't lie," McDonald's CEO Steve Easterbrook said in a 23-minute video overview of the plan. "I will not shy away from the urgent need to reset this business."

Easterbrook said the company would strip away layers of management, focus more on listening to customers, and act faster to adapt to consumers' changing tastes.

"Our existing organization is inefficient and lacks clear accountability," Easterbrook said. "We need to execute fewer things better."

McDonald's same-store sales have fallen for six straight quarters in the U.S., where the company is battling a pervasive public perception that its food is unhealthy and over-processed. The chain has also been hurt by a series of food safety scandals in Asia, which contributed to a 15% loss in net income last year.

Meanwhile the company's relationship with franchisees, who operate 81% of its restaurants, is at an all-time low and employees have been striking for higher pay.

McDonald's restaurants need to deliver "great-tasting, high-quality food with better service every time," Easterbrook said. Internally, the company needs "stronger financial discipline, faster decision-making, and hard-edged accountability."

The company will be restructured into four market segments: The U.S.; International Lead Markets (Australia, Canada, France, Germany, and the UK); High-Growth Markets (China, Italy, Poland, Russia, South Korea, Spain, Switzerland, and the Netherlands); and Foundational Markets (the remaining markets in the McDonald's system).

McDonald's will also refranchise more than 3,000 restaurants through 2018, bringing its total percentage of franchised restaurants to 90% from 81% globally.

Improving food quality will be a top priority, as well, Easterbrook said.

"In the last five years, the world has moved faster outside the business than inside," he said. "We're not on our game."