McDonald's greatest mistake

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👋 To anyone watching competitors "eat their lunch" — in 1989, McDonald's watched pizza chains dominating dinner and thought "we need that." They turned 40% of their restaurants into pizzerias. Today, only one McPizza survives…

Read time: 4 minutes | 899 words

STORY 

🍕 From Fast Food Giant to Pizza Failure

The Big Idea: Even the mightiest brands can fall when they abandon their core identity for market expansion.

McDonald's, at the peak of its fast-food empire, made a shocking pivot into the pizza business. In the late 1980s, McDonald's was the undisputed king of fast food, but watching the booming pizza delivery market, executives made a decision that would become a legendary case study in corporate overreach: they decided to take on Pizza Hut at their own game.

The initial launch in 1989 required a complete reinvention of McDonald's operations. The company invested millions in specialized pizza ovens, built custom heat-retention packaging, created new kitchen workflows, and promised customers they would deliver "fast food pizza done right."

The reality of McPizza shattered McDonald's fast-food value proposition. Pizzas cost $5.99 to $8.99 (premium pricing), family meals with drinks exceeded $15, preparation took 11 minutes, drive-thru times doubled, and kitchen staff required special training - all antithetical to McDonald's quick-service model.

Despite clear warning signs, McDonald's doubled down on their pizza gambit. During the expansion years (1990-1991), they rolled out to 40% of US locations, launched a massive marketing campaign, added new pizza varieties, installed expensive ovens everywhere, and retrained thousands of staff.

The numbers told a story of massive investment for minimal return. Initial investment reached several hundred million, average pizza prices were $5.99-$8.99, prep time was 11 minutes (compared to 90 seconds for burgers), and while they reached 40% of restaurants at their peak, by 2015 only 3 locations remained, dwindling to 1 by 2024.

The retreat from pizza was as swift as its expansion. By mid-1990s, restaurants started pulling pizzas from menus, most locations abandoned the program by late 1990s, and by the 2000s, McPizza became merely a local curiosity in a few locations.

Three stubborn holdouts kept the McPizza dream alive until 2015. The final three locations - Pomeroy, Ohio; Spencer, West Virginia; and Orlando, Florida - were all owned by the same determined franchisee who refused to give up on the dream.

McDonald's finally admitted the simple truth: pizza was too slow. Years later, they explained: "Although it was popular, the preparation time was about 11 minutes—which was way too long for us. Speed of service is a top priority."

Today, McPizza survives as a tourist attraction and cautionary tale. The final location in Orlando's "Epic McD" has become a pilgrimage site for fast-food enthusiasts, standing as a monument to what happens when a company strays too far from its core identity.

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INSIGHT

🍔 McDonald’s McF**ck-up | By the Numbers

The Pizza Failure becomes even more striking when you see McDonald's incredible rise:

The Success Story:

• 1940: $5,000 investment in first restaurant

• 1954: Ray Kroc buys rights for $950

• 2024: $217 billion market cap

• Revenue Growth: From $100K to $45.2B annually

What Made McDonald's Great:

• Restaurant Sales: $23.18B annually

• Franchise Royalties: $13.1B annually

• Real Estate Income: $8.4B annually

• Average Order Time: 90 seconds

• Average Meal Cost: Under $10

Then Came Pizza:

• Investment: Hundreds of millions

• Prep Time: 11 minutes

• Average Pizza Cost: $8.99

• Family Meal: $15+

• Result: Almost total failure

The Contrast is Stunning:

• Core Business: 90-second burgers → $217B success

• Pizza Venture: 11-minute pizzas → massive write-off

• Core Meal Cost: Under $10 → consistent growth

• Pizza Meal Cost: Over $15 → customer rejection

Key Lesson: The same company that masterfully scaled fast food nearly derailed by forgetting its core strengths:

1. Speed: 90 seconds vs. 11 minutes

2. Value: $10 meals vs. $15+ pizzas

3. Consistency: Global burger standard vs. varying pizza quality

The McPizza story isn't just about a failed menu item - it's about how even a $217B company can lose its way by forgetting what made it successful in the first place.

ACTION

💼 The "Know Your Lane" Sales Strategy

Don't let chasing new markets kill your proven success formula.

1. Know Your Sweet Spot

   • List your last 10 biggest wins

   • Find patterns: industry, deal size, cycle length

   • Example: Tom closed 8/10 deals selling $5-10K CRM systems to real estate offices in 30 days each. When he tried selling $50K enterprise systems, his close rate dropped to 1/10.

2. Create Your "No Deal" List

   • Takes 3x normal sales cycle

   • Requires learning new industry

   • Way below your price range

   • Example: Sarah excelled at selling HR software to mid-size companies. A Fortune 500 prospect took 6 months, 20+ meetings, and still didn't close—she could have closed 12 mid-size deals in that time.

3. Set Clear Boundaries

   • Minimum deal size

   • Maximum sales cycle length

   • Required margins

   • Example: Mike set a rule: "No deals under $3K or over 45 days." His commission doubled because he stopped chasing "huge opportunities" that never closed.

🚩Red Flags:

• "Just need to learn this new industry..." (Lost 3 months studying healthcare compliance)

• "If I partner with these other vendors..." (Deal fell apart after 5-vendor meeting)

• "Price is low but could lead to something..." (Led to more low-price deals, not bigger ones)

Pro Tip: Like McDonald's was great at fast burgers, you might be great at quick-close small business deals. Own it. Write down: "What made my last 5 wins similar?" That's your McDonald's burger.

MEMES