Strategic Management from an Islamic Perspective: Text and Cases

Chapter 17

Case 8: McDonald’s Pakistana

The Dilemma

It was a foggy morning in December 2012. Raza Ali, the country manager of McDonald’s Pakistan, was sipping coffee. He had read that strategic thinking was less about analyzing data and more about having strategic conversations. He reflected that maybe the textbook should be rewritten. In his experience over the last few years, it was not so much about having strategic conversations; it was more about having strategic arguments. Since McDonald’s inception in Pakistan, the fast-food giant enjoyed many competitive advantages: a strong brand name, a reputation for customer service, and ultimately high sales. However, competition has become tougher. Many local businesses have entered the fast-food market. A growing number of international fast-food chains have also entered the Pakistani market. Top management thinks that this mounting competition will hurt company profitability in the long run. To counter this competition, the top management is considering its options. Two options are currently on the table. One option, which Ali has been pushing for, is to launch the separate coffee restaurant McCafé. He is very positive about this launch and believes that Pakistani youths will become regular coffee drinkers, although most of them love tea at the moment. A second option, being championed by his colleague Rashid Ibrahim, is to continue to build the McDonald’s brand first. Better advertising, better professional training, and better ...