Discuss about the Issue faced by McDonald.
In the view point Carden, Maldonado and Boyd, (2017) of it is important to make wise decisions in most businesses but at times, the management loss where they have to begin. Strategic management decisions help in understanding the business and make wise judgement on the same. An organisation has to face many challenges throughout its business journey. For a multi-national company, the challenges increase by many folds. The challenges could be related to opening or closing of the firm, entering a new market or by entering a strategic alliance with others. This particular study discusses about the strategic issues faced by McDonald while conducting its business operation. McDonald’s is one of the most popular fast food chains of America. It was established during the 1940s in California. Right from its launch, the food chain has been attracting teenagers and fast food lovers. The company is well known for its business management strategies and always used to remain in the headlines. In this discussion, a case study of McDonald has been selected where it has been evident that it faced strategic issues when the organization thought of expanding.
Fig: Market Share statistics of McDonald’s
(Source: Carden, Maldonado & Boyd, 2017)
In the mini case study named, “Re-branding: the McDonald’s strategy”, it has been told that McDonald’s became one of the popular restaurant and a place to hang out to flush out the post-war affluence (Botterill & Kline, 2007). The company started by supplying hamburgers and applied assembly line techniques with the food production method. McDonald’s spend huge amount of money in doing its advertisements and promotion. It has always focused its marketing effort on family and children and has been found to spend heavily of television marketing. McDonald’s business strategies can easily considered under the American success story. Considering the workforce, by the year 2000, one out of eight Americans has worked at McDonald’s at some time of their lives. The company required huge workforce for carrying its operation and at the same time, it has focused on reducing the cost spend on the labours. It is for the same reason, they wanted to be rationale towards the labours and thought of replacing the human workforce with machines and robots (Botterill & Kline, 2007). By this time, McDonald’s was already engaged in some controversies and challenges related to public relations concerns.
Fig: Global Market Share of McDonald’s
(Source: : Wen & Song, 2017)
The case study highlights the community and family values that McDonald’s has always considered in its business. It started its expansion in the late 1960 from a medium sized town. At this time, McDonald’s faced certain racial allegation as well when the company denied franchise opportunities to the black people. The organisational values of McDonald’s were massively challenged. In Greenwich as well, there were protesters who kept on loitering, congesting the traffic and even rallied gained McDonald’s when it tried to open an outlet. These situations automatically reduced the profitability of the organisation and at the same time blemished the corporate image as well (Botterill & Kline, 2007). The environmental issues were related to feeding the cows that destroyed the rainforest.
Fig: Issues faced by McDonald’s
(Source: Wen & Song, 2017)
The promotion of meat based diet was criticized largely along with the packaging and the waste management. Other social issues involved, the irregular diet that the burger and food of McDonald’s was defamed for. It was claimed that the company did not follow the legislation standard of ingredients and packaged food labelling that included all the nutrients. Other strategic issue faced by the organization was related to the increasing fast food competitors in the market along with the changing lifestyle and food habit of the consumers (Botterill & Kline, 2007). Thus, the case study revealed many issues faced by the organisation during its business operation.
Q1. How public relation can be used as a tool to overcome the challenges faced by McDonald in different stages?
Q2. What competitive strategies could be adopted by McDonald’s in order to overcome the challenges?
Fig: Employee satisfaction rate
(Source: Goswami, 2013)
As commented by Rahman and Areni, (2014), it is the responsibility of an organization to abide by the legislations set for the employers and employability. In order to overcome the distress, during this period of controversy, McDonald’s changed its policy of hiring young adults. The public relation experts at McDonald’s introduced employee incentive programs. Through these programs, the employees would receive incentives for good performances, along with the wages that they receive. In order to curb down the controversy of hiring youths, they also featured happy employees in the marketing campaigns. The company also started hiring immigrant workers, people with disabilities as well as senior workers, to put an end to the controversy that occurred regarding the employment of youths.
In the late 1960s, with the rapid expansion of the food chain, McDonald’s started opening its outlets in the medium sized towns along with the large cities. The cleanliness of the food chain, along with the value for money and friendly services attracted thousands of customers. However, with the rapid expansion, McDonald’s entered into another strategic controversy. As commented by Wen and Song, (2017), expansion is the business strategy that an organisation undertakes when it wants to increase its profitability and increase its operational activities. At the time of expansion, it is important to carry out the market evaluation and conduct a survey among the target group of people. If this is not done accordingly, the risk of expansion still remained and the organisation definitely have to suffer.
In 1969, the Black community of Cleveland boycotted McDonald’s. This protest rose mainly due to the denial in the franchise opportunities, for the Black people (Carden, Maldonado & Boyd, 2017). Thus, this challenged the McDonald’s value for the mass inclusion and triggered a major controversy. In the research, Carden, Maldonado and Boyd, (2017) proposed that marketing and public relations is the key to create a better relationship with the consumer market. Many organizations are found to take this particular approach in order to improve its business capability. In the year 1947, the people residing in the Greenwich Village protested against McDonald’s. This is because this popular food chain posed a major challenge for the local food chains, thus hampering their business. The local family owned shops faced reduction in their sale and the customers pouring in McDonald’s created huge traffic jam in the neighbourhood. The huge number of customers coming to McDonald’s was found loitering around the neighbouring places, thus disturbing the residents, along with littering the place. The protest started spreading from Hell’s Kitchen to Belmont (Krishnaswamy, 2017). People from all over the places, started joining the rally. In order to curb down the spread of this rally anymore, the public relation officials worked hard to understand the demand of the customers and arrive at a mutual understanding with the community. This situation could easily be handled if proper measures were taken in terms of good public relation activity.
Fig: Most praised organisation in terms of CSR
(Source: Goswami, 2015)
Corporate social responsibility and sustainability is another important strategic approach that is undertaken by an organization in order to create a better image of itself in the market where it operates. In the recent time when the environmental condition is degrading, the role of sustainability and CSR has increased by many folds. In fact, as mentioned by Li, Hsieh and Chang, (2016), for the multi-national companies, this responsibilities fall under the regular operations of the organization. McDonald’s has also faced environmental issues, thus triggering controversy once again. During the period of late 1980s, a huge demand for the beef was seen in order to satisfy the demand of the popular hamburger chain McDonald’s. This had a devastating effect on the rainforest as huge number of cows and buffalos had to be slaughtered down. This triggered a protest among the animal activists as they protested a ban on the ill-treatment of the animals and the huge amount of slaughtering that has been taking place, in order to fulfil the increased demand of McDonald’s. Though there was huge protest regarding the slaughtering of the animals, one of the biggest environmental issues faced by McDonald’s is its ineffective waste management and environmental unfriendly packing (Carden, Maldonado & Boyd, 2017). McDonald’s had been using cardboard boxes for selling their burgers.
The food products with which the company deals with requires proper packaging. The use of plastic or other non-biodegradable products will create devastating result on the environmental condition and thus, it should fall under the major responsibility to consider materials used for the packaging of the products (Goswami, 2015). From the year 1975, McDonald’s started using Styrofoam packaging. This new form of packaging kept the burgers hot as well as the tomato and lettuce cold. Thus, the food was kept intact in this form of packaging (Rowley & McMurtrey, 2016). However, health professionals highlighted that the Styrofoam packaging contained carcinogenic elements, thus imposing a ban on the use of these packaging. In the year 1987, people started boycotting McDonald’s and its plastic packaging. Thus, over and again, McDonald’s have been involved in various strategic issues.
The analysis of the above-mentioned case study highlights the fact that McDonald’s have been involved in various strategic issues. These issues resulted in the defacement of the brand image of McDonald’s. In order to ensure that McDonald’s faces no such strategic issues, few recommendations could be made. McDonald’s should carry out in-depth market research and understand the target population. This will ensure that McDonald’s will not face further protests from the local community, regarding the loss of local business. Moreover, the packaging should be given importance. McDonald’s should use only environment friendly and biodegradable packaging materials, to ensure the CSR activities (Rowley & McMurtrey, 2016). The waste materials that are obtained from the company should be managed effectively to reduce environmental pollution. The waste management activities will ensure that environmental activities do not display protest against McDonald’s. It has to be understood that the lifestyle of people has been changing along with their demand and so, the strategy of the organization should consider these points and then further actions should be taken.
Conclusion:
McDonald’s is one of the most famous fast food and hamburger chain. Being one of the major players in the industry of fast food, the company has some social and environmental responsibility that cannot be denied. Strategic issues are common in any business. However, it is important that the company should device itself to overcome the strategic issues faced. This assignment highlights various strategic issues and the recommendation of overcome those issues. Thus, following the recommendations, McDonald’s will be able to overcome the strategic issues and will resume operating in glory, as a leader of the fast food and hamburger industry. The effective waste management, along with use of environment friendly packaging is effective in enhancing the business of McDonald’s. There is no doubt that McDonald’s rank among the largest fast food giants and the success of the organisation is due to the strategic management steps that have been undertaken by the company. The company needs to analyse the business environment and then work accordingly along with abiding by the legislation of the country. If this is done accordingly, the company will keep of moving forward
References:
Botterill, J., & Kline, S. (2007). From McLibel to McLettuce: childhood, spin and re-branding. Society and Business Review, 2(1), 74-97.
Carden, L. L., Maldonado, T., & Boyd, R. O. (2017). Organizational resilience: A look at McDonald’s in the fast food industry. Organizational Dynamics.
Goswami, S. (2015). A Study on the Online Branding Strategies of Indian Fashion Retail Stores. IUP Journal of Brand Management, 12(1), 45.
Krishnaswamy, S. (2017). Sources of Sustainable competitive Advantage: A Study & Industry Outlook. St. Theresa Journal of Humanities and Social Sciences, 3(1).
Li, H. H., Hsieh, M. Y., & Chang, W. L. (2016). Lucky names: Superstitious beliefs in Chinese corporate branding strategy for bank marketing. The North American Journal of Economics and Finance, 35, 226-233.
McDonald, J., & Kuhn, T. R. (2016). Occupational branding for diversity: managing discursive contradictions. Journal of Applied Communication Research, 44(2), 101-117.
Rahman, K., & Areni, C. S. (2014). Generic, genuine, or completely new? Branding strategies to leverage new products. Journal of Strategic Marketing, 22(1), 3-15.
Rowley, B., & McMurtrey, M. E. (2016). McDonald’s and the Triple Bottom Line: A Case Study of Corporate Sustainability. Journal of Strategic Innovation and Sustainability, 11(1), 33.
Wen, J., & Song, B. (2017). Corporate Ethical Branding on YouTube: CSR Communication Strategies and Brand Anthropomorphism. Journal of Interactive Advertising, 1-13
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