First steps

by Erica Shaffer
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Steve Easterbrook, CEO, McDonald's
McDonald's CEO Steve Easterbrook says the company's new business structure is "exciting and liberating" for the company.

OAK BROOK, Ill. – For McDonald’s Corp. the road leading to a “modern, progressive burger company” is lined with change.

CEO Steve Easterbrook announced the first steps in McDonald’s turnaround plan. Easterbrook previously said he intends to make the fast-casual giant into a customer-centric burger business that delivers a contemporary dining experience.

“The immediate priority for our business is restoring growth under a new organizational structure and ownership mix designed to provide greater focus on the customer, improve our operating fundamentals and drive a recommitment to running great restaurants,” Easterbrook said in a statement. “As we turn around our business, we will look to create more excitement around the brand and ensure that we build on our rich heritage of positively impacting the communities we serve.”

The first critical step is restructuring the business. Beginning July 1, McDonald’s will operate under a new organizational structure. McDonald's new market segments are:

US: The company’s largest segment accounting for 40 percent of McDonald’s 2014 operating income.

International Lead Markets: established markets including Australia, Canada, France, Germany and the United Kingdom which collectively represented 40 percent of the company’s 2014 operating income.

High-growth Markets: China, Italy, Poland, Russia, South Korea, Spain, Switzerland and the Netherlands which accounted for about 10 percent of McDonald's 2014 operating income. These markets have higher restaurant expansion and franchising potential, according to the company.

Foundational Markets: The remaining markets in the McDonald’s system which the potential to operate under a largely franchised model. Corporate activities will be reported under this segment, the company noted.

With the new segments come leadership appointments:

• Mike Andres will continue to serve as president – McDonald’s US;

• Doug Goare was appointed president - International Lead Markets. He currently serves as president - McDonald's Europe;

Dave Hoffmann, currently president of McDonald's Asia/Pacific, Middle East and Africa (APMEA), named president of High-Growth Markets; and

• Ian Borden, currently CFO of McDonald's APMEA, was named president - Foundational Markets.

“Our new organization creates a structure under which leadership of McDonald's new segments will be able to more effectively address the common needs of their markets and customers,” Easterbrook said. “It is critical that we position our management talent within our new structure in a way that capitalizes on their skill sets.”

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