More Is Less in Mcdonalds’ Business Model Innovation

The US is an obese nation. Our #1 fast food company, a company many argue contributes to the rise of obesity in the US, is only making the situation worse. Its “32-ounces for $1” customer deal is a bad one for its customers’ future health.

The promotion is also a bad deal for McDonalds long-term success. Michael Porter, a renowned Harvard Business School strategist, argues that winning companies of the future will be those that create shared value – they increase societal value, not just customer value by what they provide or how they provide it. In other words, they benefit the community at large beyond customer value and income generation.

Porter is right – in today’s copycat economy, companies that advance society’s interests will attract the best talent and build winning brands. McDonalds therefore is off-trend, looking to me like the successful cigarette companies of the 1970s. More important, McDonalds, in my book, is finally open to another assault on its market share. The last worthy assault came when Subway lured McDonalds customers away with fresh and lower-calorie meals.

Burger King could grab share from McDonalds by re-branding itself around healthy choices for parents who want to raise kids with healthy eating habits, and adults who want healthy fast food options. If Tata can figure out how to make a car for under $2,000, then a fast food restaurant can figure out how to create an affordable healthy meal.

A fast food hamburger meal could be much healthier – whole wheat rolls, limited condiments, low-fat ground beef, baked sweet or russet potato chips replacing greasy fries, and refreshing drinks with no corn syrup. The business model innovation rests in defining processes and creating partnerships to offer affordable and healthy consumer solutions.

I can see the advertising strategy that positions Burger King right up against McDonalds. Show an obese Ronald McDonald, with print copy reading: “Is this what you want for your children’s...