In the early hours of November 4, McDonald’s announced the dismissal of CHIEF Executive Officer Steve Easterbrook for violating company policy and having an intimate relationship with an employee. relationship). McDonald’s statement came as Steve, 52, admitted in an email to McDonald’s employees that he had violated the company’s rules on personal conduct.
“This was a mistake,” Steve wrote in an email, “and I agree with the board’s decision to let me go, given the company’s values.” ”
Foreign netizens joked that the CEO’s strength interprets the McDonald’s slogan “I like it” (I’m love it).
Increase profits without increasing income
McDonald’s market value doubles in four years
Steve, 52, has been chief executive of McDonald’s since March 2015. Prior to that, he was Chief Brand Officer at McDonald’s and was head of McDonald’s UK and Northern Europe.
Before Steve took over from former CEO Don Thompson. McDonald’s performance has deteriorated and it is facing its worst decline since 2012.
During Steve’s four years in office, McDonald’s revenues have continued to decline, while net profit has grown dramatically.
Between 2015 and 2018, McDonald’s revenue fell to $144.3 billion from $165 billion in 2015. But net profit rose 3.47 per cent, 10.79 per cent and 14.10 per cent respectively over the three years.
Analysts point out that during Steve’s tenure, franchises have been in the dying of business. So far, more than 90% of McDonald’s direct stores have been sold to franchisees, which is the main reason why McDonald’s revenue does not increase revenue.
Still, the market is bullish on McDonald’s, whose shares rose 139.44 percent during Steve’s tenure and now have a market capitalization of $147.3 billion (about 1031 trillion yuan).
Buffett Misss 15 Years 30 Times of McDonald’s
Buffett, who drinks Coca-Cola and ate McDonald’s three times a week, has been regretting the loss of McDonald’s that year.
In 1996, in the five months since McDonald’s pulled back from highs, Buffett spent $1.265 billion, making it the largest single investment ever.
It should be said that this investment was very successful, the bid price was the lowest price at that time. But a year later, he sold it almost at the original price – earning only one year in dividends. McDonald’s shares are said to have risen only slightly and fallen back to where they were, as earnings reports showed sales had stopped growing.
But soon after Mr Buffett sold, mr. Market, who had a wacky mr. Market, more than doubled his share price, made him and Mr. Munger deeply regret it, and always nagging about “making $1 billion less.”
In February 2003, the chance to make up for regret came, and McDonald’s share price fell to half his price that year, but Buffett turned a blind eye and was unmoved – even though he said on several occasions that it was a good company.
So far, McDonald’s shares have nearly tripled from about $7 at the time to $193.94 today.
Clearly, Mr Buffett is probably making far more than $1bn.
A wild franchise strategy
McDonald’s China changed its name to “Golden Arch”
Under Steve’s franchise strategy, China’s McDonald’s has quietly become the “Golden Arch.”
On August 8, 2017, Citic Share and Carlyle Investment Group tied McDonald’s China revenue to $2.08 billion.
The newly formed McDonald’s China will operate and manage McDonald’s operations in Mainland China and Hong Kong, China.
In 2017, McDonald’s changed its name to Golden Arches, which was described as “one of the most sensational marketing on the Internet in 2017.”
“I wanted to use another name, McDonald’s won’t let me use, I called the Golden Arch in one breath, the last news about this is read online 9 billion times, the average Chinese see 6 articles about changing the name of various articles, this kind of marketing efforts can be found in other parts of the world?” This suggests that the potential for consumption is enormous. Zhang said bluntly.
In fact, Zhang’s words are not false.
McDonald’s did not separately disclose sales in China in its third-quarter 2019 results, though.
But last year, McDonald’s opened 432 new stores in China, according to the results, and now the total number of McDonald’s stores in China now stands at 3,249, with more than 170,000 employees.
McDonald’s China has also set a target of double-digit sales growth over the next five years from 2018 and expects the number of McDonald’s restaurants in mainland China to grow from 2,500 to 4,500 by the end of 2022. The pace of opening new restaurants will gradually increase from about 250 a year in 2017 to about 500 per year by 2022.
Business growth in China has been one of the biggest bright spots in McDonald’s earnings compared to stagnant U.S. operations.
Not the first CEO to resign over office romance
Steve is not the first CEO to be forced to resign because of an office romance.
In June 2018, Intel announced that Intel CEO Brian Krzanich had had an intimate relationship with company employees. After an internal and external investigation, Intel confirmed that Brian had violated the non-goodwill regulations that all managers were required to comply with, and that the company accepted Brian’s resignation in order to uphold Intel’s values and uphold the code of conduct.
Brian joined Intel as a process engineer as early as 1982 and became CEO of the company in 2013 to lead Intel’s corporate strategy toward data-centricization.
During Brian’s tenure, Intel’s revenue capabilities continued to grow and its Q2 earnings in 2018 hit a new record, with total revenue of nearly $16.9 billion, thanks to the accelerated growth of data centerization.