McDonald’s 3Q14 initiatives

Part of McDonald’s (MCD) initiative is to make improvements in the “Made for You” platform. It was introduced almost a decade ago. It allows McDonald’s to offer more sandwiches to its customers. The platform made changes in the kitchen’s cooking procedures.

Must-know: McDonald’s management initiatives for 3Q14

McDonald’s has been reimaging its stores. We discussed this in our 2Q earnings series. It also adopted the Apple Pay across its restaurants—including drive through.

In the U.S., McDonald’s worked towards letting customers personalize their orders through the “Create Your Taste” concept. This allows a customer to build anorder based on personal preferences.

Modernization isn’t uncommon among restaurant companies. For example, Brinker International (EAT) introduced a table top device. Chili’s falls under EAT. Burger King (BKW) is also revamping its stores. Dunkin’ Brands (DNKN) has been pushing promotions through its mobile application.

Restaurant stocks can also be found in the Consumer Discretionary Select Sector SPDR Fund (XLY).

The changes are more incremental. It remains to be seen whether it’s the convenience to purchase the food or the food itself impacts McDonald’s same-store sales growth. The company also took steps to change its menu.

In the U.S.

In the U.S., McDonald’s is working to give its restaurants more autonomy. Restaurants will be able to offer locally relevant food to the customers. This could mean that new menu items—like the Clubhouse Burger, Cheddar Bacon, Onion, Mozzarella Sticks, and Chorizo Burrito—would be available at different locations. The items wouldn’t be available at all McDonald’s restaurants.

However, this strategy needs to be executed carefully. It’s important that the strategy doesn’t slow down kitchen operations. Also, McDonald’s doesn’t want customers to leave the restaurant with a negative experience.

To counter this, management stated that it will simplify the menu. It will “highlight customers’ favorites,” that are locally relevant. It will be easier for the kitchen staff to prepare the orders quickly.

In the next part of the series, we’ll discuss McDonald’s revenue.

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