Project post-mortems: McDonald's Arch Deluxe burger

The Arch Deluxe, launched in 1996 and discontinued in 2000, was an attempt to appeal to a more sophisticated demographic and move away from the association of burgers with kids. It was marketed as the ‘burger with grown-up taste,’ because it included mustard, pepper, and circular bacon. Sounds good to be fair. Unfortunately, it also came with a higher price tag, which was uncharacteristic for McDonald’s. But despite McDonald’s heavy, $300 million, investment, the Arch Deluxe was a colossal failure. So, what went wrong?

 

Poor market research

Step one: know your audience. It’s so simple and we all know it. It’s integral to mapping out the rest of the project. McDonald’s did their market research and somehow surmised that adults craved a more sophisticated burger option, but the research guiding this initiative was flawed.

This is a corporation that notoriously built its success on family- and budget-friendly meals. The Arch Deluxe’s marketing campaign alienated regular customers by implying that their usual menu wasn’t good enough for adults. Rather than attracting a new demographic, the brand risked losing its loyal, established customer base.

This failure highlights the importance of thorough research and data literacy. Clearly, the sample size wasn’t big or diverse enough, meaning that the research results were a product of sample bias. It’s a classic case of a business losing sight of its primary audience in an attempt to chase something new.

 

Misaligned branding and communication

The Arch Deluxe’s failure was also a result of inconsistent branding. McDonald’s is famous for fast, affordable food. Trying to rebrand themselves as a sophisticated restaurant for adults was far too much of a reach and ultimately caused confusion.

The advertising campaign featured children turning their noses up at the Arch Deluxe in favour of Happy Meals, completely missing the mark. The messaging came across as condescending and contradicted the McDonald’s core values, taking away from its authenticity and integrity.

Strong communication and branding strategies are fundamental in project management. Without alignment between the product and the brand identity, projects can quickly fail. Maybe a better strategy for McDonald’s would have been to integrate the Arch Deluxe into its existing family-centric brand image.

 

Stakeholder misalignment

Behind every project are multiple stakeholders, and if they’re not seeing eye-to-eye on things, it’s impossible to perfectly execute the vision. In the case of the Arch Deluxe, there were missteps in engaging both internal stakeholders (franchisees) and external ones (customers).

Franchisees, who bore the financial burden of introducing the new burger, were hesitant. The ingredients were more expensive, and the Arch Deluxe’s higher cost wasn’t in line with McDonald’s usual pricing. This created resistance amongst the franchisees, further dooming the burger’s success. In the end, the return on investment simply was not enough to keep up.

An effective and forward-thinking Project Manager would have prioritised buy-in from key stakeholders early in the planning process.

 

Overbudgeting without clear ROI

McDonald’s spent an insane $300 million on developing and marketing the fancy burger, including an aggressive advertising campaign, kitchen upgrades, and new packaging. But as a result of the lack of risk management and financial forecasting, the investment failed in terms of ROI.

Let this be a lesson to any aspiring Project Managers that robust cost-benefit analysis is an absolute must. McDonald’s could have done with a more thorough understanding of the Arch Deluxe’s potential profitability before committing so much time and resources. In project management, balancing ambition with financial know how is imperative to long-term success. You can’t just conceive an idea and execute it – these things take time.

 

Lack of adaptability and contingency planning

When the Arch Deluxe didn’t meet initial sales expectations, McDonald’s was slow to adapt. A critical aspect of successful project management is agility and flexibility. Whether working on a new product or a complex IT project, project leaders must be prepared to pivot based on feedback and performance. For Maccie’s and the Arch Deluxe, a different marketing approach, or a rethink around distribution could have salvaged the project.

 

Key lessons for project managers

The Arch Deluxe serves as a powerful reminder that even industry leaders can stumble. Here are the key project management takeaways from this case study:

• Know your audience: Deep market research and data literacy are non-negotiable. Misreading your audience can devastate even the most well-funded projects.
• Align branding with your product: Ensure that new projects fit your existing brand identity; consistency invites trust and engagement.
• Engage stakeholders early: From internal teams to end users, clear communication is critical for buy-in and success.
• Invest wisely: Before committing and wasting time and resources, conduct a thorough cost-benefit analysis.
• Be willing to adapt: Agility and contingency planning allow you to respond effectively to unexpected challenges.

 

The Arch Deluxe’s flop may have been a very expensive faux pas for McDonald’s, but for aspiring Project Managers, it’s a goldmine of lessons.

At Learning People, we believe that every project offers an opportunity for growth. If you’re looking to refine your project management skills and learn from real-world examples, explore our range of project management courses. Let us help you unlock your potential.

Header image by Roland Magnusson - stock.adobe.com