Betting on high-quality chicken products and restaurant design returning to fun! McDonald's Corporation (MCD.US) aims to upgrade the dining experience to attract consumers.

McDonald's Corporation (MCD.US) is betting on a series of measures, from higher quality chicken products to a brand new children's play area, in hopes of making the fast food experience "less like fast food". As part of its strategy to improve food quality, McDonald's Corporation is testing new menu items including hand-breaded chicken wings and chicken sandwiches. The company believes that these measures, along with more interactive social media marketing and restaurant upgrades, will help McDonald's Corporation further solidify its position as the preferred dining brand for consumers - not only for quick meals on the go, but also for family gatherings and other consumer scenarios. McDonald's Corporation will continue to uphold its core advantages of "high value for money" and "fast service", but CEO Chris Kempczinski stated that consumers nowadays "want to get more value for the same money". He noted that as competitors continue to upgrade their menus and introduce new products in rapidly growing categories such as chicken, beef, and beverages, consumer expectations are rising. At the same time, accelerating inflation and weakening consumer confidence are further increasing the challenges faced by McDonald's Corporation. Kempczinski stated in an interview, "Providing a better consumer experience is now more important than ever." This week, McDonald's Corporation will announce this development vision at a global franchisee conference and work with franchisees to finalize specific implementation details. Currently, approximately 95% of McDonald's Corporation stores worldwide are operated by independent franchisees. So far this year, McDonald's Corporation's stock price has fallen by about 10%, lagging behind the 11% increase in the S&P 500 index. McDonald's Corporation's U.S. sales have outperformed its peers for four consecutive quarters According to data from the food industry research company Technomic, thanks to successful marketing campaigns like themed meals featuring "Minecraft" and value menus that appeal to price-sensitive consumers, McDonald's Corporation's U.S. sales have exceeded industry growth for four consecutive quarters. The company hopes to maintain this momentum. However, high consistency and predictability also have side effects. Robert Byrne, Senior Director at Technomic, stated, "Every time a consumer visits or orders from a McDonald's, their experience is almost always the same, so there is rarely a memorable experience." Betting on high quality chicken and beverage business As franchisees continue to ask how they can further differentiate themselves, the management of McDonald's Corporation spent about six months developing a new strategy called "Next" to upgrade their food lineup. One of the core strategies is to upgrade the food offerings. To compete with chain brands focusing on chicken tenders, such as Raising Cane's, McDonald's Corporation is currently testing new items including hand-breaded chicken, such as new chicken sandwiches made for their Deluxe McCrispy sandwich. Additionally, McDonald's Corporation will be launching a colorful selection of iced beverages to compete with the rapidly rising beverage brand Dutch Bros. McDonald's Corporation also plans to raise the quality standards for coffee, such as emphasizing the best time to use coffee beans after opening. McDonald's Corporation is also researching the introduction of plant-based milk products. Currently, McDonald's Corporation in the U.S. only offers whole milk. Another focus is on improving the service consistency and execution details at over 45,000 stores worldwide. Tiffany Boyd, Global Chief Human Resources Officer at McDonald's Corporation, stated that the company is reviewing the employee training system and increasing opportunities for employees to experience "making food strictly according to standard procedures". Senior management at McDonald's Corporation will also participate in these training courses. Boyd stated, "Putting a hamburger on the grill for an extra 30 seconds may not seem like a big difference, but when employees taste the difference themselves, they will be more motivated to strictly follow the standards." Restaurant design returning to fun For over a decade, McDonald's Corporation has been focused on making its stores more modern and stylish. However, in the process, vibrant colors have gradually disappeared, cartoon mascots have faded out, and the store style has become increasingly grey and uniform. These changes have been criticized by many consumers. Gil McDonald's Corporation's new Chief Restaurant Experience Officer, stated that the company plans to inject some "fun elements" back into their stores, while also making the designs more spacious and open. Possible improvements could include larger drive-thru windows, allowing customers to see the order preparation process, refurbishing the children's play area, improving employee break rooms, redesigning the McCaf beverage preparation area, and enhancing the uniformity of store designs globally. Emphasizing both automation and human service Furthermore, with rising costs in fuel, labor, and food, McDonald's Corporation must also increase the efficiency of individual store operations. Kempczinski stated, "Franchisees are facing real inflation pressures, and there is real political risk." "We must find ways to make our restaurants run better and more efficiently." Automation is one of the solutions. McDonald's Corporation is currently collaborating with Alphabet Inc. Class C (GOOGL.US) to develop an AI-based drive-thru ordering system. Kempczinski revealed that the current system's accuracy has reached 90%. However, he declined to disclose the company's ultimate target level. Meanwhile, Kempczinski believes that customer demands for service experience are continuously increasing. Therefore, McDonald's Corporation wants to ensure that every customer receives a friendly service experience every time they visit. For example, training employees to greet customers proactively; enhancing the interactive experience between people. Kempczinski stated, "If, one day in the future, customers walk into McDonald's Corporation and don't need to interact with any employees at all, I don't think that's a good thing." Embracing proactive marketing McDonald's Corporation also hopes to create more content that consumers will actively share on social media. For example, collaborating with YouTube creators with large fan bases; actively planning viral marketing campaigns, rather than passively waiting for products to go viral. The company hopes to replicate the success of previous themed "Minecraft" meal campaigns. This promotion included limited edition collectibles, store-themed decorations, in-game digital rewards, sparking significant consumer participation and online sharing. Of course, this also means that the brand must relinquish some control. Previously, Kempczinski's somewhat hesitant expression while tasting a McDonald's Corporation burger unexpectedly went viral online. In response, McDonald's Corporation's Global Chief Marketing Officer Morgan Flatley stated, "When you allow others to use your brand for creative purposes, there are always risks." "But the reality is, whether we participate or not, these things will happen." "As such, we should embrace it proactively."