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MCDONALD’S CORPORATION Presenters: Ali Farooqui Ali Raza Irfan Ullah Mohsin Kamal 1
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Page 1: McDonalds

MCDONALD’S CORPORATION

Presenters:

•Ali Farooqui•Ali Raza

•Irfan Ullah•Mohsin Kamal

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Page 2: McDonalds

MCDONALD’S CORPORATION

Q: What were the basic issues of McDonald’s Corporation?

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MCDONALD’S CORPORATION

GLOBALIZATION

•World is becoming a global village

•Customer tastes and needs are changing

•Businesses are changing too

•Adaptive strategy 3

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MCDONALD’S CORPORATION

Basic Issues of McDonald’s Corporation

•Health

•Environmental

•Employment

•Advertisement

•Expansion

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MCDONALD’S CORPORATION

HEALTH ISSUES

•Health consciousness

•Mass-produced processed food

•Perception about fast food

•World Health Organization’s report

•Nutritionists arguments

•Biggest stumbling block to the development of McDonalds

•Super-size me

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MCDONALD’S CORPORATION

Fat content of McDonald’s food:

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

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ENVIRONMENTAL ISSUES

•The annual production of packaging

•Destruction of tropical forests

•McDonald's contribution to environmental destruction is mainly through:

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

•Waste reduction task force• Crown boxes• Corrugated boxes• McRecycle• Sandwich packaging

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• McDonald’s On-premise Waste Characterization Study:

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EMPLOYMENT ISSUES

•Workers at McDonald's lack:• Full time of employment• No benefits• No or little control over their workplace

•McDonald's jobs have been purposely de-skilled• Production line system helps in de-skilling• No training needed• No need to employ chefs and qualified staff

•No Unions• Policy to prevent unionization• Success rate

•Depend on young labor to earn fat profits• Three quarters of their workers are under 21 years of age

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

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EMPLOYMENT ISSUES

•Discrimination• McDonald’s is only interested in recruiting cheap labor

• Disadvantageous groups• Women• Black people• Minorities (who have no job opportunities)

•Complaints from employees• Discrimination and lack of rights• Too much understaffing• Few breaks and illegal hours• Poor safety conditions • Kitchens flooded with sewage• The sale of food that has been dropped on the floor• This type of low-paid work has even been termed 'McJobs‘

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

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MCDONALD’S CORPORATION

EMPLOYMENT ISSUES

•All the points mentioned earlier leads to:• High turnover rate• Unhappy employees

• Slow service• Missing product/wrong order• Unclean restaurant

•Dissatisfied employees leads to unhappy customers and ultimately to the shrinkage of their profits

•McDonald’s is working against the Resource-based view, specially in the case of human resources 11

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

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MCDONALD’S CORPORATION

ADVERTISEMENT ISSUES

•McDonald's spending

•Popularity of Golden arches

•McDonald’s bombards Children by:• Using collectable toys• television adverts• promotional schemes in schools• Figures such as Ronald McDonald

•Parents and consumer organizations objected against the advertisements targeting children

•They are cost focus

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

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MCDONALD’S CORPORATION

EXPANSION ISSUES

•Emergence of local fast food competitors

•35 years of relentless expansion resulted in their first ever quarterly loss

•Franchisees are cutting corners in customer services

•New franchises are cannibalizing the sales of older restaurants

•Overseas expenditures are killing operating margins

•The expansion has made the firm vulnerable to the slow economies of the other countries

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Sources: http://businessfinancemag.com/article/growth-trap-0627, http://www.mba-tutorials.com/marketing/284-mcdonalds-swot-analysis.html, Accessed on 30th may,2010

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EXPANSION ISSUES

•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

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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. However, 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 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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ANY

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QUESTION

?