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Top 10 Questions For McDonald's Quarterly Call

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By Corporate Accountability International :

1. "Kitchen sink" crisis management: Since April, McDonald's has tried everything from an ineffectual digital strategy to customizing burgers , bringing cameras into meat processing plants and putting cargo pants on its clown mascot . But McDonald's strategy seems unfocusedand chaotic, even schizophrenic at times. Is this part of an intentional turnaround strategy or is the corporation just throwing everything at the wall to see what sticks?

2. Is McDonald's best shot at Millennials to run from itself? In December McDonald's opened "The Corner" in Sydney , a suspiciously "hipster-esque" café with table service and gourmet burgers. Tellingly, the café contains almost no sign of McDonald's branding. What is the future of this beleaguered brand if Millennials will only eat its food when they don't know they're at McDonald's?

3. To Simplify or Not to Simplify : McDonald's has expressed the need to simplify its menu since October. Yet, in trying to compete for Millennial market share, it is doing exactly the opposite. Its new "customizable burgers" add a new level of complexity to restaurants' current production model. Is it possible for McDonald's to both "simplify" its menu and add this additional level of complexity to attract Millennials?

4. Millennial Flight: McDonald's is losing its Millennial market share as Millennials increasingly prefer fast-casuals like Chipotle and Panera Bread. Millennials are not just concerned with the quality of the food they're buying: they're concerned with the practices of the corporations they're buying that food from. Does McDonald's understand the extent to which recent worker and labor unrest and ongoing concerns with its kid-targeted marketing practices are driving Millennials away? Does it have a plan to address this beyond more PR and marketing?

5. Ronald in Schools: At the 2014 shareholders' meeting, CEO Thompson publicly denied putting Ronald into schools . On its December 2014 investor call, Mike Andres contradicted Thompson, saying, "We have to get McDonald's owner-operators into schools," calling this school-oriented engagement the brand's "heritage." What is McDonald's schools strategy? Is getting Ronald into schools a smart strategy considering the public's increasing distaste for marketing to children?

6. Regulatory Climate: McDonald's core and expansion markets are increasingly concerned with, and taking action against, marketing to kids. In the US, Michelle Obama and the USDA are initiating action to restrict junk food marketing in schools. McDonald's has been caught in violation of national advertising regulations in multiple countries including Brazil and Chile . Does McDonald's see any liability in staying the course on its marketing strategy? And, most importantly, how does it plan to mitigate risk to shareholders?

7. Is it junk food or not? As recently as 2013, CEO Thompson claimed, "We don't sell junk food." Subsequently, McDonald's has focused one marketing campaign after another on promoting "healthier" options on its menu. Yet McDonald's most recent Big Mac ad mocks healthy, high-quality food, telling "vegetarians, foodies and gastronauts" to "kindly avert [their] eyes." Isn't this "be everything to everyone" strategy partly responsible for McDonald's decline in market share to begin with?

8. Turnover at the Top: Over the last few years, there's been a tremendous amount of turnover in McDonald's senior management, including two McDonald's USA Presidents, former President & CEO Jim Skinner, CMO Neil Golden, and COO Tim Fenton. Why has there been so much turnover in McDonald's senior management? How has this contributed to McDonald's current financial situation?

9. Weight loss? McDonald's is shedding 63 corporate jobs as part of an effort to save $100 million to redirect to its digital and "Experience of the Future" strategies. How will the rapid loss of these 63 positions impact McDonald's operations and its ability to carry out its ever-more-complicated marketing and sales strategies?

10. Labor of love? The NLRB has accused McDonald's of violating workers' rights, arguing that it is effectively a "joint employer" at franchises. On the 2014 Q3 earnings call, CEO Thompson touted McDonald'sfranchisee structure , which operates 81 percent of McDonald's restaurants. Has McDonald's assessed the potential impacts of the NLRB case on its structure and operations if the complaints are successful? Would the decision force fundamental changes on McDonald's business structure? And how would those changes impact McDonald's bottom-line?

Disclosure : None

See also Senomyx's ( SNMX ) CEO John Poyhonen on Q4 2014 Results - Earnings Call Transcript on seekingalpha.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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