The Future for McDonald’s Corp. (NYSE:MCD)

McDonald’s Corp. (NYSE:MCD) had recovered from the great recession rather nicely. Yet, the company’s shares are down by 7% since the start of the fiscal 2012; during this time, S&P 500 increased by 60%.

McDonald’s Corp. (NYSE:MCD)’s problems are caused by several reasons, which include the food scandal, that lead to temporary closure, in China and poor decisions regarding its menu. Still, the investors are really interested to know that where will the company stand in future?

According to Asit Sharma, an analyst, a company’s greatness can be measured by the way it tackled an existing crisis. McDonald’s Corp. (NYSE:MCD) deeply understands that their problems do not begin at some external factors, but at their own menu. The company took steps to alleviate the problem:

McDonald’s Corp. (NYSE:MCD) reduced the menu complexity; they stepped up the market on their more profitable menu items while eliminating the low-value items.
McDonald’s Corp. (NYSE:MCD) has also encouraged its franchisees to upgrade their kitchen. As a result, pretty soon the customers will be able to customize their orders.
McDonald’s Corp. (NYSE:MCD), instead of bringing exotic tastes to all localities, will now focus more on the local tastes and introduce menu items according to that. This could potentially attract a lot of customers and boost sales.
McDonald’s Corp. (NYSE:MCD) understands that the changes in the menu must be followed up by brand transparency and use of local food ingredients.

The company is now considering their approach towards resource allocation. Instead of the projected number of 1500-1600 new restaurants, the company will now only open 1400 new restaurants this year. The company is cutting costs worth about $200 million to $300 million in the current fiscal. The total spending in 2014 will amount up to $2.7 billion.

Asit Sharma has predicted that the company will rise above S&P 500, as it has done previously, in terms of total returns in the next two year. By five years, McDonald’s Corp. (NYSE:MCD) will see top-line growth.

Another analysts, Rich Duprey, says that McDonald’s Corp. (NYSE:MCD)’s performance in the last year is a small bump on a long road. Other fast-food giants had to face scandals similar to the one that McDonald’s Corp. (NYSE:MCD) faced in China. They came out of it and so can McDonald’s Corp. (NYSE:MCD).

The thing is that McDonald’s Corp. (NYSE:MCD) is not only facing a single problem, but several. Consumers now want to have more wholesome food instead of fast-food. The social food trends are changing and so, McDonald’s Corp. (NYSE:MCD) needs to focus on bringing healthier food on its menu.

McDonald’s Corp. (NYSE:MCD) is the leader in the breakfast category; it has 31% market share. However, rivals have introduced their breakfast lines to compete with that of McDonald’s Corp. (NYSE:MCD), and so, this is very lucrative.

Over time, this competition will only become more intense. Dining tastes of consumers are now rapidly changing and then there are the random food quality issues. McDonald’s Corp. (NYSE:MCD) will probably remain under for a few years according to Duprey.