McDonald's shifts focus to customer experience

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By: Wise Marketer Staff |

Posted on April 15, 2003

McDonalds is to begin a process of growth by building sales within its existing restaurants rather than relying on adding new restaurants, according to the fast food giant's CEO, Jim Cantalupo. The firm will now focus its attention on improving the customer's experience through efficiency and discipline throughout the business.

Cantalupo and other members of McDonald's senior management announced their plans for revitalising the company's worldwide business at a meeting with the investment community in New York City this week.

"The world has changed. Our customers have changed. We have to change, too. Growth comes from being better, not just expanding to have more restaurants," said Cantalupo, opening the meeting. "The new McDonald's is focused on building sales at existing restaurants rather than on adding new restaurants. We are introducing a new level of discipline and efficiency to all aspects of the business and are setting a new bar for performance."

Key changes
The new plan includes a commitment to being more relevant to the lives of today's consumers, and pursuing realistic growth targets over the next 12 - 18 months.

As a result of the changes to be made, McDonald's expects capital expenditures for 2003 to be US$1.2 billion (fully US$800 million less than in 2002 and US$700 million less than previously announced).

The company still expects to open another 620 traditional restaurants and 340 satellite restaurants worldwide.

For 2005 onward, Cantalupo is aiming at annual sales growth of between 3% and 5%, of which 2% is expected to come from new restaurants, with the remainder coming from increased sales through existing restaurants.

McDonald's chief operating officer, Charlie Bell, explained "To achieve our four business objectives - attracting more customers, increasing frequency, building brand loyalty, and increasing productivity - we will concentrate on the five drivers of superior customer experiences: people, products, place, price, and promotion."

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