Arcos Dorados: A QSR Recovery Plan

By: and and and

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Synopsis
Arcos Dorados-McDonald's largest independent franchisee, covering Latin America and the Caribbean (LAC)-faced a pandemic that was disrupting the entire consumer foodservice business in 2020. With the exclusive right to own, operate, and sub-franchise McDonald's restaurants in LAC since 2007, the company served over 40 million customers a day at its almost 2,300 restaurants sprawled in 20 markets across LAC, reporting revenues of roughly $3 billion and $291.8 million EBITDA in 2019. Although results for 2020 had looked promising, in late March 2020, governments throughout the region implemented quarantine measures in response to a novel coronavirus disease (COVID-19), affecting the company's normal operations. Forced to withdraw a previously approved 2020-2025 plan for restaurant openings and reinvestments, the company had to focus on a strategy to reduce the impact of the pandemic on the company's finances. Based on its strengths vis- -vis its competitors, Arcos Dorados' recovery plan hinged on five pillars: i) McDonald's restaurants' reputation for people care and food safety; ii) the company's capabilities to explore new channels for food purchasing and delivery; iii) McDonald's good "value-for-money" perception; iv) a consolidated brand with unique offerings; and v) a sustainable-minded company, with initiatives underway to enhance its brand image. Once the crisis was contained, the company had to draft a new six-year plan, including capital outlays for restaurant openings and reinvestments. Given its current position and strengths against its competitors, should Arcos Dorados grasp this opportunity to pursue an aggressive growth plan? Or, considering the post-pandemic economic downturn expected in the region, should the company come up with a more conservative plan or even contemplate downsizing? How should the plan differ by country?
Copyright:
2020

Book Details

Book Quality:
Publisher Quality
Publisher:
Harvard Business Publishing
Date of Addition:
Copyrighted By:
HBS
Adult content:
No
Language:
English
Has Image Descriptions:
No
Categories:
Nonfiction, Business and Finance
Submitted By:
Bookshare Staff
Usage Restrictions:
This is a copyrighted book.

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