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Home territory has suffered
McDonald’s has faced increased competition over the past few months, which have mostly impacted its North American turnover. The company also experienced an Asian turnover drop because of a food scandal at one of its local suppliers. All in all, McDonald’s turnover dropped 2 % in 2014, down to 27.4 billion dollars (24.7 billion euro).
Steve Easterbrook, the new CEO, has now come up with a plan to cut up the organization into four divisions: the United States, internationally leading markets, markets with growth potential and other markets – in an attempt to streamline the company’s structure.
The company will also cut costs: it will soon close 700 under-performing restaurants, mostly in the United States, Japan and China, which should help save up to 300 million dollars (270 million euro). Increasing the number of franchisees, from 81 % to 90 %, should also help lower costs. New restaurants will be opened in countries with growth potential, like Poland, Russia, Switzerland and South Korea, which McDonald’s hopes to do so with mostly franchisees.
