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The expansion push illustrates the company's dilemma: McDonald's needs more stores to dominate trading areas, increasing the chances that a hungry consumer will head for the Arches. But the more stores that go up, the harsher the economics becomes. The company had to develop a program to compensate store owners for encroaching locations. "We've made some mistakes in our desire to create a leadership tradition in particular trading areas," says Greenberg. The company has scaled back its expansion plans. But he is not apologizing: "We have an enormous lead in convenience, and we are not going to cede it."
From a managing standpoint, McDonald's is making a difficult transition. This is a company that is used to crushing the competition. Now, its markets mature, it is finding every sales dollar harder to come by. Greenberg is reportedly planning a restructuring that would embrace this reality and make the corporate side more responsive to the folks who sell the hamburgers. And Campaign 55 is just the first volley in what will be a long war. McDonald's does have some advantages, Greenberg points out, not least of which is one of the most powerful brands in the world. "It's worth remembering that we've got this fabulous thing going," he says. Indeed. He's simply got to get it going a little faster.
--With reporting by Greg Fulton/Atlanta, James L. Graff/Chicago, Nancy Harbert/Albuquerque and Valerie Marchant/New York