Marketing Strategy | Class Participation: Individual Assessment



The article gives the reasons why McDonald’s profits have dropped by 21% in 2014. The article tries to explain the reasons that made McDonald’s profits to drop in 2014 compared to the results registered in 2013. Increased competition from burgeoning fast casual joints like chipotle, Panera Bread and Five Guys has led to McDonald’s sales revenue to slump down in the recent past. Food safety Scandals in Asia is also another major reason that has contributed to lower profits by the company. The food safety scandals led to a decline in customer confidence with the restaurant chain reducing customer return to the restaurant. As a result, the sales revenue in Asia, Middle East as well as Africa declined by 4.8% in the fourth quarter of 2014. Lower consumer confidence in Europe as well as closure of various outlets in Russia and Ukraine led to falling of sales revenue by 1.1% in the region. Few customers in the United States led to a fall of 1.7 % sales revenue due to heightened competition.