Retired Marketing Chief Attends Exec 'Boot Camp'

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CHICAGO ( -- Following its sixth straight quarterly earnings decline, McDonald's Corp. heads into its annual shareholders meeting May 23 with a mammoth task -- to show it has the right strategy and the right team to overcome operational struggles, marketing miscues and a saturated industry landscape.

The meeting comes as systemwide sales grew a paltry 1% to $40.6 billion last year, and net income fell 17% to $1.6 billion. Moreover, McDonald's has been losing market share since 1999 while some rivals, most notably Wendy's International, have gained, according to industry consultant Technomic.

"It's fair to say we are not happy with the way we execute in the U.S. restaurants," said Mats Lederhausen, exec VP-strategy and business development.

'Have the ability'
"We have the ability, management and staff to drive same-store sales and build new stores," Mr. Lederhausen said. "If we don't we should be fired." More importantly, he said McDonald's, the country's 17th largest U.S. advertiser, with $1.3 billion in 2000 spending, has a new, intensified focus on the brand. "It's a lot less about advertising than what people may think," Mr. Lederhausen said. "When people enter our restaurants, they enter our brand. We have to focus on what we do to deliver the brand promise."

Repairing marketing may be a tougher task. Last month, CEO Jack Greenberg told franchisees "marketing was broken" and said the company was searching for a global chief marketing officer.

Former marketing chief
Earlier this month, the chain summoned alumni from its heyday to help spell out how to fix brand McDonald's. Described as a "boot camp" by one attendee, the meeting was attended by two retirees -- former Chief Marketing Officer Paul Schrage and Chief Creative Officer Roy Bergold-which does not signal great confidence in McDonald's current marketing leadership.

However, a spokesman said McDonald's has "enormous confidence" in its team.

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