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Gaining Focus In Business:
Can McDonald's Work Its Way To Clarity
Or Is The Problem, Possibly, That Mozzarella Sticks Aren't On Its Menu?

McDonald’s is a bit lost.

It is fighting back against many trends in society — healthy eating, upscale concepts, etc. — with a random barrage of things.

First it rolled out breakfast items all day, although many franchisees have doubts because breakfast is less expensive than lunch or dinner food.

Now, when it confronts Five Guys, Shake Shack and similar concepts, it rolls out, ta da … Mozzarrella sticks:

McDonald’s is rolling out mozzarella sticks at its restaurants nationwide next year.

McDonald’s US President Mike Andres announced the menu addition at an investors’ meeting in New York City Tuesday.

The fast-food chain started testing the fried cheese sticks in Wisconsin this summer.

McDonald’s said at the time that customers wanted more snacking options.

‘Our customers told us they are looking for the ability to customize their meals a little more,’ a franchisee told Fox 6 in July. ‘People are snacking more often these days and looking for more options to create a right-sized meal for them. Mini meals allow them to do just that at an amazing value.’

McDonald’s is charging $1 for three mozzarella sticks.

This follows on innovations such as the McCafe line of upscale coffee drinks.

Its Chief Executive Steve Easterbrok is throwing meat to the lions, by trying to calm shareholders with promises of stock buybacks and higher dividends, but also claims the company is fixing its business:

…in the remarks, Mr. Easterbrook said McDonald’s had for too long asked its customers to adapt to it when it should have been adapting to their tastes and preferences. McDonald’s is now toasting buns longer and changing the way it grills meat to increase juiciness, as well as improving order accuracy with new training programs and procedures, he said.

“We have focused too intently on the functional components of value, specifically price,” Mr. Easterbrook said. “This has emphasized the transactional, less emotional aspects of our brand.”

But Mr. Easterbrook may not be too certain of the turnaround program. The hot issue was whether McDonald’s should spin off its real estate into a Real Estate Investment Trust (REIT) — a proposal that is advantageous from a tax standpoint but would leave McDonald’s without a big reliable cash flow if things are not going well with the food business.

We would see the problem of McDonald’s as analogous to the problem of the traditional supermarket. It is trying to serve too many people all at once — service time has extended, and McDonald’s has neither the cheapest nor the best burger. 

Just as ALDI is winning because it does one thing — low prices very well  McDonalds needs to decide what it can actually do very well. It’s probably not some hodge-podge of breakfast and burgers and salads and coffees and Mozzarella sticks!

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