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McDonald’s makes major global restructure

Following the appointment of president and chief executive officer Steve Easterbrook (read also: McDonald’s chief brand officer takes on CEO role), the company has announced plans to “reset and turn around” the business.

“As we look to shape McDonald’s future as a modern, progressive burger company, our priorities are threefold – driving operational growth, returning excitement to our brand and unlocking financial value,” Easterbrook said.

He said that the immediate priority for the business is restoring growth under a new “organisational structure and ownership mix”.

The first step would be to strengthen its effectiveness and efficiency to drive faster and more customer-led decisions. The business would be classified into four new segments, beginning in 1 July this year as follows:

The US (accounting for 40% of McDonald’s operating income last year), international lead markets (established markets including Australia, Canada, France, Germany and the UK – this represented about 40% of the Company’s 2014 operating income); high-growth markets (markets with relatively higher restaurant expansion and franchising potential including China, Italy, Poland, Russia, South Korea, Spain, Switzerland and the Netherlands) and foundational markets (the remaining markets in the McDonald’s system).

Easterbrook added that the structure would be supported by streamlined teams with fewer layers and less bureaucracy, and markets would be better organised around their growth drivers, resource needs and contributions to the company’s overall profitability.

This includes new leadership for the regions:

Dave Hoffmann, currently president – McDonald’s Asia/Pacific, Middle East and Africa (APMEA), will transition to the role of president – High-Growth Markets. Ian Borden, currently the chief financial officer – McDonald’s APMEA, will assume the role of president – foundational markets. Mike Andres will continue to serve as president – McDonald’s U.S. Doug Goare, currently president – McDonald’s Europe, will become president – International Lead Markets.

It also outlined plans to refranchise 3,500 restaurants by the end of 2018.

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