The Order of Improving…Better, then Bigger

John Moore has a great post about McDonald’s today.

He remarks on the steady growth they’re seeing since posting their first ever quarterly loss in 2002.

John points out that this is from an inside-out approach to driving sales. He makes the point that McDonald’s traditionally grew by opening new locations…and not improving their current ones.

Sure, this worked for them for a while, but obviously the technique has caught up with them. Backlash from things like “Supersize Me” hurt them, but I don’t think this was the entirety of their pain. McDonald’s has wrapped up the cheap and easy in food sales. But, they rested on those laurels for so long that it turned on them. With the availability of so many choices, people started looking for quality as well as speed. People got used to good (or at least decent) food fairly fast and (through companies like Starbucks) we started to expect an experience…not just delivery.

Sure, McDonald’s may not compete with Starbucks coffee or experience, but that’s not their target. They saw that people liked better coffee, so they tried to make some changes to improve the coffee. They saw that people were looking for a “third place” so they started making their restaurants more comfortable. Will McDonald’s ever overtake Starbucks as a “third place?” I doubt it, but they are making the right changes to stay relevant.

McDonald’s is moving in the right direction. There’s some great quotes in John’s post, so I’d suggest reading it.

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The Order of Improving…Better, then Bigger

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