How has globalization affected McDonald’s operations? Free Essay Example

This reputation of the company as being a global company has also proven a weakness as it is a recognisable target for anti-globalisation protestors and other actions groups such as we see in the well known McLibel case in the UK. In this the company pursued a case against a very small amount of individuals and gained much negative publicity (Guttenplan, 1996). This type of publicity will always have a negative effect as it appears to disregard the personality of the individual person (Hooley et al, 1998).

Even though McDonalds won the case they lost the fight for public opinion (Europe Intelligence Wire, 2004). Globalisation means that the negative image created becomes a global image. There have also been many different protests regarding globalisation and the effect of trade on the different countries. The benefits of comparative advantage are recognised by these groups, the problem being the way in which the advantage is not even spread, and may also bring other problems, such as social and economic due to the increased inequality of wealth in the poorer countries.

McDonalds as a global company and well known name has found itself on more than one occasion a victim of violence due to this public perception, on May Day in London in 2000 a store in city was vandalised and practically destroyed due to this perception. This may not be so important to the company due to the small proportion of the incidents, but for the franchisees which operate in these restaurants. Therefore globalisation has changed the way in which the company may be seen, but it was also globalisation that opened the door for the company to expand internationally.

The ability of a single company to have a global image resulted in increased demand for the goods. Placements in US television programmes and films was also a driver for the demand. This was seen when the first McDonalds opened in Moscow, despite being relativity expensive there were lines that took hours to reach the front of the line to be served and demand was very high, resulting in the restaurant selling out of many goods. There have also been accusation made in terms of the way that company operates and determining the truth from fiction is difficult.

It does appear that with the increased demand for cheap beef McDonalds in the US has looked to south American suppliers where rain forest may have been cut down to create ranches. However, due to the nature of the goods the supply chain benefits are limited as each ingredient is relatively low cost. The main influence has been on the way the company has been able to spread and expand, but also on operational aspects of marketing and the need to change and develop to meet the needs of local markets as times have change.

For example, the war on Iraq has left many potential counters with an anti American attitude and McDonalds has suffered form this, especially when seeking to attract Muslim customers. If we look at McDonalds its current position and concerns then we can see how it needs to change. The core menu has changed throughout the years, but has remained fairly constant in style since the 1960’s a time when the Big Mac as introduced (Business Week, 1998). This in itself was a change to the menu of a restaurant which had been founded in 1937, but it has been a long term change (Business Week, 1998).

As any marketing expert will confirm products have a life cycle, and a thirty year life cycle is very good without the need to revamp and change the product to keep it fresh. The menu has not remained static as once the public stated to get tired of beef the Chicken Nuggets were introduced, as such the menu can be seen as a strength as it is adaptable and new products are introduced (Kotler, 2003). At the same time there have seen many health concerns regarding the level of nutrition and level of fat in the meals.

In these new additions to the menus the marketing department reassert their expertise as within four years of being introduced in the United States the chicken nuggets were the countries second most popular selling product, but these were still not healthy (Business Week, 1998). The most recent changes have been changes to the chicken nuggets lowering the salt levels and also changing the meat to white meat only. The introduction of the healthy range of food has also been a change, but it may be argued that has occurred very late and the company is now trying to regain its former position.

The problem may be seen as related to both the lifecycle of the products and the public perception of the offerings which together mean the perception has become quiet negative. The ability of McDonalds to retain its customers has been limited and the way in which the company has grown can be seen by many as a weakness due to the phenomenal increase in the fast food and restaurant has not resulted in the same proportional increase in profits for the chain. ”McDonald’s has totally failed to adapt its original concept,” (Simon C. Williams, chairman of the Sterling Group quoted in Business Week, 1998).

Here we can see the need to adapt and change, the core concept may remain but may also need to be brought up to date to consumer needs Sales in some products have fallen as the products are seen as old and tired, this is emphasised when there are some many more new products being offered and menus are increasing in their variety. The placement of the actual meal within the restaurant is usually seen by way of the promotions in the restaurant, with posters advertising the latest toys, possibly backed up by television or radio commercials.

Promotion also takes place with advertisements that will often be branding advertisements aiming at new customers. For example, the new range of breakfast times, or salads, showing a now target market which may not have been altercated in the past. The company is seeking to align itself with the more health conscious section of the market as well as the current core target market. The marketing to children still remains, but this is also emphasising the health aspects and the improvement in the food. The new tag line of ‘I’m loving it’ also seeks to emphasise the lifestyle aspect rather than just the product.

The changes have been seen in terms of offering new products as well as the way in which food nutrition leaflets are meant to be available. This goes some way to counter balance the negative publicity caused by programmes such as ‘Super size Me’. Which were made purely to ‘expose’ the poor health nutrition of the meals. Now there are many goods, such as salads and flat bread grilled chicken sandwiches that are self, but the image remains that of burgers, as salads are not perceived as fast food. The image needs to change to fast and healthy, but this has some way to go yet.

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