McDonald’s Corporation (NYSE:MCD) poor earnings were the result of competitors’ sustained activities in the market as stated by the hamburger giant. This was the main reason why people refrained to dine there, thus causing a 2% decrease in comparable-store-sales for McDonald’s Corporation’s (NYSE:MCD) quarter compared to Burger King Worldwide Inc.’s(NYSE:BKW) 4.2% increase.

This was the fourth continuous quarter that Burger King Worldwide Inc.(NYSE:BKW) hit the market with growth while McDonald’s Corporation(NYSE:MCD) showed a decrease all throughout 2014. However, Burger King Worldwide Inc.(NYSE:BKW) did have help in its growth with limited-time offerings such as its chicken fries as well as its A1-ultimate bacon cheeseburger. This strategy proved effective as customers left franchises with smiles on their faces.

Burger King Worldwide Inc.(NYSE:BKW) was able to increase its sales with the right amounts of low-priced premium products. While on the other hand McDonald’s Corporation(NYSE:MCD) has faced difficulty in finding the best product to launch with its management reporting the complexity of its menu. However, the company aims to overcome this problem through its new initiative; create your taste. This initiative focuses on customization in the company’s offerings.

Don Thompson, the company’s CEO stated that the company is asserting more leadership through offering choice and customization in its offerings. Through this initiative, they aim at bringing in more customers through the door and eventually increasing their sales.

Speaking along investor terms, there hasn’t really been a rebound in McDonald’s Corporation’s (NYSE:MCD) performance. The company had flat comparable sales for January however; there still may be hope with the redesign in the company’s menu. Investors are on edge and it is vital for the company to prove itself.

On the other hand, Burger King Worldwide Inc.(NYSE:BKW) had been witnessing solid growths in return to its capital investments, which helped it modernize and redesign nearly half of its store base ahead of time. These remodeled stores resulted in a 14% average sales lift.

If we look closely, McDonald’s Corporation(NYSE:MCD) may have a competitive advantage given that it has enough cash to go against any kind of capital spending that competitors pull off. It aims to use billions in remodeling as its investment goal in 2015. While other investors such as Chipotle Mexican Grill Inc.(NYSE:CMG) has invested only $250 million in 2014. Therefore, McDonalds’ Corporation (NYSE:MCD) doesn’t have a cash crunch issue as yet, but it needs to figure out a way to attract customers as quickly as possible.

The recent increases in Burger King Worldwide Inc.’s(NYSE:BKW) sales give us this hope that people aren’t turning away from fast food. Therefore the hamburger giant does have a chance to turn things around for it and if it’s lucky it can even bring back its former customers.

However this isn’t as easy as it looks. Even with the budget and customer experience, the company will have to do much better. Let’s see just how well the company’s menu changes prove to be with respect to its growth.

Although Shake Shack seems to be doing better than McDonalds (NYSE:MCD), however investors might want to think before buying into any of the two companies. Shake Shack (NYSE:SHAK) is priced much higher than what Wall Street experts had anticipated and currently there are 36.3 million outstanding shares amidst the two stocks. This indicates that the small franchise has gathered a market capitalization of about $1.7 billion in just one day of its trading.

This is a huge amount considering the fact that previously the food chain could just generate 106.7 million in sales. In 2013 the company just gathered $82.5 million in revenues. The future also looks brighter for the company as it plans on expanding its chains in Chicago as well as Austin. It is being assumed that the new chains by Shake Shack (NYSE:SHAK) will not do as well as the burger joints that open in New York do.

The burger places in New York potentially make $7 million a year and according to speculations Shake Shack’s (NYSE:SHAK) new locations in their annual sales will not be able to make even half of that amount. McDonald (NYSE:MCD) trades at 3.3 times sales, however most of its revenue is gathered in the form of franchise royalties. McDonald (NYSE:MCD) yields 19 times the earnings of the previous year as it tries to bounce back from a rather difficult and challenging year.

The company has seen 5 continuous bad years and it has just replaced it CEO which has put the fat food chain in a pickle. In order to turn things around for McDonald (NYSE:MCD) the company will have to win back the public. McDonald (NYSE:MCD) is no doubt taking the right steps towards bringing the customers back. However, some of the steps that the company took were over the top like its “signs” campaign and the promotion that the company came up with on Monday saying “Pay with Lovin”.

Although these might be risky initiatives but given the scenario that McDonald (NYSE:MCD) is in it is understandable why the company is taking these steps. McDonald (NYSE:MCD) also rewards its investors with a yield of 3.7%. The company has also consistently increased its dividend annually since it began it payout policy in the year 1976. Although Shake Shack (NYSE:SHAK) has a long many years to grow but it will take a long time to come up with a justification of its $1.7 billion market cap.

The companies that make gravel and stone, for construction purposes, also performed well in the market after China announced cuts. The performance was above that of other companies. Five days after the cut was made by People’s Bank, China, the stock of McDonad’s Corp. (NASDAQ:MCD) increased by 71%. The median return was of 2%. This cut may bring more good news to McDonad’s Corp. (NASDAQ:MCD).

Earlier this year, McDonad’s Corp. (NASDAQ:MCD) had to face a food scandal about one of its meat suppliers in China. As a result, some of the menu items had to be removed and the company lost its popularity in China. McDonad’s Corp. (NASDAQ:MCD) had to look for new meat suppliers. Same-restaurant sales dropped by 9.9% in the last quarter because of this, in the Middle East, Asia-Pacific and and Africa branches of the restaurant.

Meanwhile, the shares of Vulcan Materials (NASDAQ:VMC) increased by 71%, five days following the cuts by China Government. Martin Marietta Materials (NASDAQ:MLM) also increased by the same percentage in the same time duration. The median return for both companies was 3%.

However, ironically, neither Vulcan Materials (NASDAQ:VMC) nor Martin Marietta Materials (NASDAQ:MLM) sell construction materials to China. But, China is the second-largest economy in the world. So, when China cut its interest rates, it globally raised the prices of construction materials. This is because the cut starts a domestic build-out.

The rate of growth was decreasing in the economy for two years. So, after a couple of years of watching the show, PBOC surprisingly decreased their basis points for one-year lending rates. They cut 40 basis points from the benchmark, the new rate is 5.6%. This was the first move by PBOC in two years, which was made to counter the slowing growth in China.

Many companies in China have had to struggle against debt. The slow growth rates that have prevailed the Chinese economy for about 25 years, mean that the companies are unable to generate enough money to pay back their loans and so, find themselves indebted.

According to the chief Asia economist at the Capital Economics in London, the cut rates in China will reduce the pressures on bank borrowers.  Typically, such companies are those that are state-owned. They will benefit the most from the new scheme.

The move by PBOC acknowledged the risks to the growth of the Chinese economy and ensures that the economy stays afloat even as it is expected to go lower. The court also described the rationale for changing its policy. One of the reasons was to give banks more relaxation so that they can set up their own interest rates.

McDonald’s (NYSE:MCD) suffered a loss of 6 percent in the last six months as far as share price is concerned. However, there is still a way to reverse this decline. McDonald’s (NYSE:MCD) require an activist shareholder, that is serious about investing in the company and reviving its lost glory. It might seem like a steep task, but it’s not really that hard, considering the power McDonald’s (NYSE:MCD) can exert. Back in 2005, the activist hedge fund Pershing Square invested in McDonald’s (NYSE:MCD) and urged the company to consider reconstruction. Pershing pitched a suggestion that McDonald’s (NYSE:MCD) should separate its real estate business and its fast food chain business. That would improve shareholder value. At that time, the rising stock price of the company proved as a hurdle for Pershing to persuade McDonald’s (NYSE:MCD) to do so. Pershing went out with a profit, however, they anticipated murkier waters for McDonalds (NYSE:MCD) in the future.

McDonald’s (NYSE:MCD) waning stock could be stabilized if the investors of the company make an offer to Pershing to come onboard again. If not Pershing, then perhaps another activist hedge funding organization. The strategy worked for Burger King (NYSE:BKW), which only deals with real estimate and franchise agreements. McDonald’s (NYSE:MCD) won’t make a move like that by itself but if it is persuaded by an activist, it might form an agenda around it.

McDonald’s (NYSE:MCD) can also help its situation, if it stops complicating its menu or bringing back old offers in order to regain customers and sales. McDonald’s (NYSE:MCD) must embrace the fact that the problem is centered on health. McDonald’s (NYSE:MCD) should pull some strings and gain the public trust by introducing meals that have healthier options. This would not only attract the usual teenage age groups, but will also bring in the adults and aged person.

McDonald’s (NYSE:MCD) is also revamping its image, changing the organizational hierarchy and whatnot. According to the changes, the franchises will have more power over local markets when it comes to marketing decisions. McDonald’s (NYSE:MCD) is really looking forward to simplifying the menus and enhancing the quality of the food it is offering. If McDonald’s (NYSE: MCD) makes acute decisions, in the times of current market scenario, things will get better.

According to CEO Daniel Schwartz, the third quarter has been a blessing for the company as not only did they witness string sales, but an overall growth globally. In the US and Canada, the sales broke old records set in 2012. All this has been made possible due to new strategies in place, and a combination of new products and value offerings.

Looking into the company’s meal deals, the company didn’t make any healthy menu, instead they were product launches made on a large scale. For example, its BBQ Bacon whopper deal, was just boosted through its digital and social media campaigns. So here we can see, that the deal isn’t a healthy food option, and has cholesterol written all over it. But it’s won the crowd over. It’s not that the healthy eating trend hasn’t set in, it’s just that it’s more of a niche. Hence blaming your company’s losses on shift in eating trends sounds more like an excuse than a reason.

According to the latest conference that took place between the McDonald (NYSE:MCD) executives and analysts, it seemed like McDonald (NYSE:MCD) just had a list of excuses prepared instead of any strong strategy to handle the situation. They did have plans to reinvent the company but details weren’t disclosed.

The Burger King (NYSE:BKW) call was more focused on the list of success on how well the company is doing overall. Discussions on what worked and what did not, as well as the big launches like the Ultimate Cheeseburger, King deals, value meal and the Big King sandwich.

When comparing the two, Burger King (NYSE:BKW)’s bacon deal spells out unhealthy and yet hasn’t slowed sales. So, maybe it’s a good idea for McDonald (NYSE:MCD) to improve its product development team. The problem, it seems lies with the product development team, as over the years, McDonald (NYSE:MCD)’s hasn’t introduced a scrumptious menu, instead its long and complicated list of meals. Whereas Burger King (NYSE:BKW)’s management team keeps coming up with new and fresh idea for meals that are marketed well.

Not as aggressive as you may think

There are times when companies talk about huge buybacks just to shock the market, but that is probably now what McDonald’s (NYSE:MCD) is doing. Up to now, its buybacks have been steady and not aggressive or hurried bringing back $628 million in shares during 2014’s second quarter and $704 million in its third.

At the rate of $704 million every quarter, McDonald’s (NYSE:MCD) may buyback $2.8 billion stocks a year. This is only 3% a year, with a $92 billion market cap, but it will increase diluted earnings per share by approximately 3%. This means the dividend may increase by 3% without raising cash flow expenditure for its payment. Since 1976, McDonald’s (NYSE:MCD) has increased its yearly dividend, and its yearly share buyback has fallen from $3.95 billion (2007) to $1.81 billion (2013).

Changes on the way

A buyback is only right when McDonald’s (NYSE:MCD) has undervalued stock and the core business continues growing. Peter Bensen, McDonald’s CFO, and his team know the company has been making mistakes recently, but know how to become profitable again. Bensen said in a conference call that they understood the situation well and would take the required measures to tackle its challenges.

Don Thompson, McDonald’s CEO, further communicated that they were happy with the work of their teams across the globe to ensure long-term profits, and though there have been challenges, they have managed them efficiently.

The innovative McDonald’s

From January 2015, McDonald’s (NYSE:MCD) wants to revert back to its basic menu just like during its growth period.  This simplified menu would enable a smaller customer waiting period and ease kitchen work, so it can concentrate on introducing items catered to specific local areas

Thompson believed customers want customized items containing local elements, along with a modern-day eating environment and the option to choose what they order, how they order and how they receive the order. That doesn’t mean favorites like chicken McNuggets, Big Mac and Quarterpounder will disappear, it means their will be additional items with a localized taste.

Thompson discussed how McDonald’s (NYSE:MCD) lost its market share to rivals who serve items with a local taste, and has finally realised that. McDonald’s (NYSE:MCD) is known for its Turkish lamb burgers, Japanese sushi and Indian McCurry in the international market, but wants to focus on the US and other areas. Perhaps we may see a Phoenix-style McChimichanga or a NewOrleans-style McCrawdads.

Silly considerations

Overall, McDonald’s (NYSE:MCD) buyback isn’t very big, when its market cap and huge cash flow are deliberated. Perhaps investing in its own stock is a good idea while it’s still down. A good 3.6% current dividend return and rising annual dividends, it seems the market is appraising McDonald’s (NYSE:MCD) for its failed initiatives. It is a good idea to buy stock when it’s down when compared to prospects for growth.