McD's deploys Gulf War tactics in burger blitz

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McDonald's Corp., fearing it is losing the battle of the burgers, is going on the attack with a top secret new strategic program.

Code named "Prometheus Project," the effort is modeled after military aerial campaigns used in Iraq in 1991 during Operation Desert Storm. McDonald's push is being led by John Warden, founder of Montgomery, Ala.-based Prometheus Strategies. Mr. Warden is a former U.S. Air Force fighter pilot credited with orchestrating the U.S. air campaign during the Persian Gulf War. He began lending his combat prowess to corporations in 1998 when he formed Prometheus Strategies with change consultant Leland Russell.


McDonald's West Division, along with two other unidentified regions, has called on Mr. Warden to lift sagging sales. In June, operators in the West Division held a three-day meeting in Orange County, Calif., with about 50 franchisees and Prometheus executives to identify problems and set sales goals for the next three years. Franchisees in San Diego also met with the strategist in June and August, according to an internal memo obtained by Advertising Age.

The burger titan is closely guarding specifics of its program. But according to Prometheus Strategies' Web site, its Prometheus Process is rooted in the four-stage Grand Strategy, based on "imperatives" that serve as an execution action plan. At the core of the plan is the concept of changing "centers of gravity," using a "parallel attack approach" and quickly exiting a strategic cycle. McDonald's is at the "centers of gravity stage," according to the internal memo.

Melissa Russell, VP-partner at Prometheus Strategies, would not comment on its work with McDonald's, referring calls to the company.

Representatives from McDonald's were unreachable as the West Division held a convention in Las Vegas. McDonald's executives at national headquarters couldn't be reached at press time.


The fact that the division is reaching out to launch the Prometheus Project isn't surprising. The area is among the most competitive due to the sheer density and variety of fast-food chains. The Pacific coast has the highest number of units in the country with 18% of the nearly 244,000 quick-service restaurants in the U.S, according to NPD Group.

Moreover, McDonald's sales estimates for July and August are dismal, with insider reports noting sales averages up about 1.5% but transaction counts down as much as 6%. Contributing to the sales increase are higher prices, especially in Southern California, where operators are facing surging electrical costs in addition to higher labor costs and slimmer food margins because of discounting.

McDonald's has aggressively adopted discounting schedules in several markets that vary by region. Such day-of-the-week specials as 29› hamburgers and 39› cheeseburgers are pervasive in the West Division, under the umbrella of "Outrageous Values." As another means to raise sales, 550 McDonald's units in Southern California launched a Mexican-inspired Fiesta Menu last month.

Marketing is expected to play a role in the Prometheus Project. Some staffers from McDonald's agencies have participated in the strategy sessions; it couldn't be learned whether they were from national or regional shops. Although the company is still in the early stages of the planning process, it's believed the program's trickle-down impact will be felt on its marketing calendar.

In theory, the Prometheus process embraces fast, multidimensional strikes, which could require the company's marketing calendar to be more flexible to take advantage of opportunistic endeavors. Currently, McDonald's kids' calender is largely driven by its alliance with Walt Disney Co.


McDonald's posted weak second-quarter sales and first-half results. Domestic sales in July, which should have benefited from the full month of heavy media rotation for the chain's $500 million "We love to see you smile" campaign from DDB Worldwide, Chicago, were flat compared to July 1999 at $1.7 billion.

During a recent conference call, an analyst asked McDonald's CEO Jack Greenberg about the failure of the "Smile" campaign to ignite sales this summer. Mr. Greenberg's response: "These things take time."

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