How McDonalds recovered from the food scare in 2015

In 2015, McDonald’s took a plunge in their sales number due to food scare in China and Japan.

Primarily due to contaminated meat being processed in their supplier’s factory in China, referenced from Forbes. To regain confidence in consumers, McDonald’s adopted a series of restructuring and quality control in various segments.

Using WE Development's Demand-Supply Improvised (DSI) model, let us look at how McDonalds implemented positive change!

1) Retain consumer’s confidence

2) Acquire reliable resources

3) Concentrating on their demand

1) Reflected in DSI model – Retention

First, McDonald’s has various retention plans in place. Right after the scandal, Japan McDonald’s immediately switch suppliers by using chickens from Thailand.

In China, despite other big players leaving this common supplier; OSI Group, McDonald’s chose to stay with their key supplier by addressing their plans logically, using a different Chinese plant of theirs as they believed meat quality is still the key. 

Also, in the same year, McDonald’s announced to use chickens without antibiotics. This has a significant effect on regaining trust so big that other food chains like KFC and Subways are forced to position themselves with non-anti-biotics meat.

Second, McDonald’s has communicated this model publicly, showing their determination in implementing change.

Third, they continued to listen, revise, and refine. They were not letting the same mistakes to happen again. In 2017, McDonald’s decided to shut down nearly 170 outlets in India after food standard issues was found with their Indian franchise.

2) Reflected in DSI model – Resource

First, McDonald’s openness has enabled them to find grounds for using chicken meat that does not have anti-biotics.

Second, they have validated that using chickens without anti-biotics is a health benefit to her consumers, which is reflected in various health articles easily accessible online.

Third, they pledged and have acted to work towards using chicken meat without anti-biotics. They have successfully done it.

3) Reflected in DSI model - Demand

First, McDonald’s decided to be closer to their demand by identifying local strategic partners to franchise their business. In Japan, they are already close to their demand and have started to look at price and menu suitable to their consumers.

Secondly, McDonald’s listened and priortised their customer’s demand. In Japan, they listened and prioritised working on their Quality, Service, and Cleanliness (QSC) as this is the direct message to regain trust after the meat scandal. 

In China, they priortised by working with local partners to identify critical strategic points to regrow their China market share.

Third, to act swiftly, in 2017, McDonald’s has agreed to make a partnership with a local partner for their China and Hong Kong business. In 2016, Japan McDonald’s revised its menu priority on cheaper alternatives and suiting the local appetites.

Gentle Note

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Our references:

https://www.forbes.com/sites/greatspeculations/2016/09/07/mcdonalds-needs-a-local-partner-to-grow-in-china/#2df1048a52ec

https://www.forbes.com/sites/greatspeculations/2014/09/11/mcdonalds-faces-declining-sales-in-asia-after-china-food-scandal/#54bb2376de18

https://www.forbes.com/sites/greatspeculations/2017/08/23/how-mcdonalds-closing-nearly-half-of-its-restaurants-in-india-will-impact-operations/#616314b71710

https://www.businessinsider.com/mcdonalds-china-food-supplier-scandal-2014-7

https://money.cnn.com/2015/07/23/investing/mcdonalds-earnings-sales-down/index.html