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mCDONALD·S CORPORATION

Presenters:

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P Ali Farooqui
P Ali Raza
P Irfan Ullah
P Mohsin Kamal
mCDONALD·S CORPORATION

Q: What were the basic issues of


McDonald·s Corporation?

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mCDONALD·S CORPORATION

GLOBALIZATION

P World is becoming a global village

P Customer tastes and needs are changing

P Businesses are changing too

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P Adaptive strategy
mCDONALD·S CORPORATION

Basic Issues of McDonald·s Corporation

P ealth

P Environmental

P Employment

P Advertisement

4 P Expansion
mCDONALD·S CORPORATION
EALT ISSUES

P Health consciousness

P Mass-produced processed food

P Perception about fast food

P World Health Organization·s report

P Nutritionists arguments

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P Biggest stumbling block to the development of McDonalds

P Super-size me
mCDONALD·S CORPORATION
Fat content of McDonald·s food:

Source: http://weightlossforall.com/fat-mcdonalds.htm, Accessed on 30th may, 2010.


mCDONALD·S CORPORATION
ENVIRONMENTAL ISSUES

P Yhe annual production of packaging

P Destruction of tropical forests

P McDonald's contribution to environmental destruction is


mainly through:

P Cattle ranching
P Growing and transportation of cash crops
P Production and disposal of thousands of packages

r P Waste reduction task force


P Crown boxes
P Corrugated boxes
P McRecycle
P Sandwich packaging
mCDONALD·S CORPORATION
P McDonald·s On-premise Waste Characterization
Study:

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mCDONALD·S CORPORATION
EMPLOYMENT ISSUES

P Workers at McDonald's lack:


P Full time of employment
P No benefits
P No or little control over their workplace

P McDonald's jobs have been purposely de-skilled


P Production line system helps in de-skilling
P No training needed
P No need to employ chefs and qualified staff

P No Unions
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P Policy to prevent unionization
P Success rate

P Depend on young labor to earn fat profits


P Yhree quarters of their workers are under 21 years of age

Source: http://www.foodfirst.org/archive/media/press/2002/mcdonaldsissues.html, Accessed on 30th May, 2010.


mCDONALD·S CORPORATION
EMPLOYMENT ISSUES

P Discrimination
P McDonald·s is only interested in recruiting cheap labor
P Disadvantageous groups
P Women
P Black people
P Minorities (who have no job opportunities)

P Complaints from employees


P Discrimination and lack of rights
P Yoo much understaffing
P Few breaks and illegal hours
10 P Poor safety conditions
P Kitchens flooded with sewage
P Yhe sale of food that has been dropped on the floor
P Yhis type of low-paid work has even been termed 'McJobs¶

Source: http://www.mcspotlight.org/case/pretrial/factsheet.html, Accessed on 30th may, 2010.


mCDONALD·S CORPORATION
EMPLOYMENT ISSUES

P All the points mentioned earlier leads to:


P High turnover rate
P Unhappy employees
P Slow service
P Missing product/wrong order
P Unclean restaurant

P Dissatisfied employees leads to unhappy customers and


ultimately to the shrinkage of their profits

P McDonald·s is working against the Resource-based view,


11 specially in the case of human resources

Source: http://www.foodfirst.org/archive/media/press/2002/mcdonaldsissues.html, Accessed on 30th May, 2010.


mCDONALD·S CORPORATION
ADVERTISEMENT ISSUES

P McDonald's spending

P Popularity of Golden arches

P McDonald·s bombards Children by:


P Using collectable toys
P television adverts
P promotional schemes in schools
P Figures such as Ronald McDonald

12 P Parents and consumer organizations objected against the


advertisements targeting children

P Yhey are cost focus

Source: http://www.mcspotlight.org/issues/intro.html, Accessed on 30th may, 2010.


mCDONALD·S CORPORATION
EXPANSION ISSUES

P 0mergence of local fast food competitors

P 35 years of relentless expansion resulted in their first ever


quarterly loss

P Franchisees are cutting corners in customer services

P New franchises are cannibalizing the sales of older


restaurants

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P Overseas expenditures are killing operating margins

P Yhe expansion has made the firm vulnerable to the slow


economies of the other countries
Sources: http://businessfinancemag.com/article/growth-trap-0627,
http://www.mba-tutorials.com/marketing/284-mcdonalds-swot-analysis.html, Accessed on 30th may,2010
mCDONALD·S CORPORATION
EXPANSION ISSUES

P Foreign currency fluctuations are regarded to be a major


problem as it uses standard pricing for its food items.

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Sources: http://www.mba-tutorials.com/marketing/284-mcdonalds-swot-analysis.html, Accessed on 30th may,2010


mCDONALD·S CORPORATION

The main question facing McDonald·s is whether they


can continue their world dominance in the fast food
industry by promoting active, healthy lifestyles when
their mainstay products continue to be linked to
obesity and related health problems. McDonald·s has
done a laudable job in marketing the concept of
consumer choice and in establishing a generous
corporate social responsibility program. owever, in
the U.S. at least, McDonald·s has not reduced
advertising to children, reformulated its trans fat
cooking oil, or lowered fat, salt, and/or calorie counts
1º on its core products. Rather than diminishing, the
issue of health and nutrition continues to escalate and
McDonald·s still remains a key target.
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