Mcdonald cost reduction strategy
In 2008 McDonald’s management made a decision that was publicly criticized by all of the Dollar Menu enthusiasts. The fast food company decided to remove that second extra slice of cheese from the infamous fan-favorite Double cheeseburger. They have also experimented in various markets what the reaction would be when they introduce the McDouble burger with only one slice of cheese versus the Double cheeseburger.
This decision of theirs resulted in a staggering global reduction of costs calculated to be nearly $279 million for 2008.
After all their tests of the Double Cheeseburger changes the McDonald’s global management discovered that most of the consumers prefer to keep the second slice of cheese and pay more cash for it.
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All in all, it has been calculated that one piece of cheese would save the franchise about 6 cents per burger. Evidently by just making a simple change removing a slice of cheese, the mega corporation was able to boost the cash flow globally by nearly $15,000 a year per restaurant.
They both saved money, by reducing the dollar menu burger to one piece of cheese and made a larger profit by charging more for the burger that was originally on the dollar menu, but is not now. SO, they did save money by removing a piece of cheese from the dollar menu burger.
The McDouble has one slice. The double cheeseburger has two slices. They removed the double cheeseburger from the dollar menu and created the McDouble. They also don't "save" money this way. They made a larger profit.
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