Influence of McDonald’s On

Various Countries

Enam ul Haq - FA17-BBA-404

Omid- FA17-BBA-402

Management Department, Comsats University, Lahore.

.

Contents
Abstract............................................................................................................................................1

Research Problem............................................................................................................................2

Literature Review............................................................................................................................3

Methodology....................................................................................................................................4

Data Analysis...................................................................................................................................5

Conclusion.......................................................................................................................................6

Reference.........................................................................................................................................7
Abstract

In our research, we have gathered the broad problems and effects caused by the huge
influence of McDonalds in the various economies of the countries. Broad vary of
McDonald’s business success within the world has influenced several countries’ economies
(Dyllick and Hockerts, 2002). Its influence has caused lots of problems to the business
region. McDonalds have had enjoyed a superior impact on the economic science of the
assorted countries (LAP 2014a).. McDonalds company headquarter is found within the
Illinois of U. S., that is a world company of possessing multi-billion dollar (Peattie, 2001).
Currently McDonalds has become one in all the biggest nutriment chains within the world.
Our analysis findings indicate that McDonalds have influenced on formed several countries’
economies level. Also, during this analysis, we've got evaluated and analyzed the impact of
McDonald business on completely different countries throughout its institution. Our analysis
reflects the broad management of McDonald’s strategy together with SWOT analysis, its
business level strategy, and its main competitors and its allies inside the completion space
(LAP 2014b). McDonalds helped out a number of countries economy greatly. It unfolded
uncountable job opportunities for the general public. McDonalds conjointly uses teenagers
for half time facilitate, that unfolded a bigger type of those who were allowed to figure
inflicting even a lot of jobs to open (LAP 2014c). Though McDonald includes a heap of job
opportunities there's a negative facet to operating there. So as to create a high profit the
McDonalds Corporation pays the workers terribly low wages and doesn't pay them for
operating overtime. Conjointly McDonalds has established alternative country's economy
likewise, in each negative and positive ways in which. McDonalds has unfold to alternative
countries gap up a lot of jobs for the voters there. One more reason McDonald’s is such an
enormous contributor to the economy is as a result of this corporation accepts food stamps
(LAP 2014d). The sole draw back to the present is that McDonald’s only accepts food stamps
from the older, disabled, and homeless.
Research Problem

McDonald’s successful economic influence on the market has caused unemployment in other
organization in its restaurant chains especially in employee recruitment (Day, 2010). The
McDonalds has influenced several countries’ economies greatly each absolutely and
negatively however thanks to its large firms dominating the markets, native businesses are
going to be forced out as their land will get bought out by firms like McDonalds. This ends
up in state for the workers in those native businesses which might have a really negative
impact on the economy as an entire thanks to less expenditure and then less "fuel" for the
economy. "McDonalds hires around one million staff within the U.S.A. To conclude,
McDonalds have each positive and negative impacts on varied economies, but in our opinion
we predict they're usually useful to the economy on offer large quantities of jobs that creates
a sequence reaction of a lot of advantages for the economy. In LEDCs it will be
straightforward for terribly massive companies like McDonalds to take advantage of native
staff (Chew, 2001). This is often as a result of more individuals will simply get any work
they will to survive. Thus they may be forced to figure terribly long hours at below
remuneration in some countries. On the opposite hand, these companies will facilitate offer
some individuals with the way out of financial condition because it provides them a supply of
financial gain wherever they wouldn't savvy otherwise. However our analysis realized that
McDonalds Corporation has caused several alternative state into other firms by recruiting
most of native staff for the organization.

Also the opposite among other issues that is caused by McDonalds economic science
influence is that the lack of workers wage within the total victuals chain restaurants from all
the organizations. As a result of the surplus worker enlisting within the McDonalds has
caused them to cut back the wage for the things and at a similar time, it forced alternative
organizations to lower their worker wages to rent additional stuffs. McDonald’s influence on
the market has caused to bring dangerous food image. To protect the image of its food,
McDonald’s presented the social media movement teasing customers to raise questions on the
ingredients it uses in the making of the food. Beauchemin and McGinn (2005).

McDonald’s executives have same they introduced too several things too quickly last year,
like Wraps and therefore the choice to substitute egg whites for its breakfast sandwiches.
That delayed service and led to inaccurate orders. On Tuesday, McDonald’s same it might
specialize in a simplified menu that highlights its most well liked things however didn't
provide specifics. The corporate has run similar programs in North American nation and
Australia, wherever it says the program has designed trust with customers.

Raising costs while not driving away customers has been tough for McDonald’s. At just once,
for example, the favored greenback Menu enclosed an enormous N’ Tasty, that was created
with a quarter-pound of beef. Consistency has long been one in all McDonald’s attractions —
folks like knowing precisely what they’ll get once they order an enormous raincoat. However
currently folks are gravitating toward places like jalapeno pepper that allow people tailor
their orders. To supply larger customization down the road, McDonald’s recently unrolled
schoolwork tables in its kitchens that may hold additional toppings and sauces. The corporate
is additionally testing a “Build-Your-Own-Burger” providing in Southern Golden State that
lets folks decide the breadstuff, patty and toppings they need.

Packaging waste is another environmental drawback McDonald ought to tackle with.

McDonald’s use plenty of inessential packing every day, that find yourself littering on the
road and buried in landfills. Convenience and immovableness are the most reason for the
packaging waste for nourishment trade. As folks currently in busy trendy manner like simple
and fast food, the number of waste that nourishment trade created thus enhanced (Aarnio and
Hamalainen, 2008). Per a survey in European nation, twenty ninth of the litter on streets is
that the wrappers and cups from McDonald’s (Gray, 2009).

So basically, problem statement indicates that the McDonalds’s organization influences many
countries which can cause various problems such as; unemployment of labor among other
organizations, excess food waste, bad food image, extreme competition, causing global
warming and many more.
Literature Review
Critical Evaluation with Empirical Evidence

McDonald’s has enjoyed lots of years of successful business markets around the globe. Even
though the company has been active for almost 70 years ever since, it has caused many
outrageous among other companies. Our theory suggests that the company has caused both
advantages and disadvantages for the market environment. One of the advantages, are the
enrollment of youth as employees in restaurant chains of McDonalds. This has caused lots of
youths and even mid-aged people to work and achieve their desired salary. Especially when it
was just established, the organization was suffering from the lack of employees but with the
further pass of time, it managed to hire new and sustain the employees.

At the same time, the recruitment of the employees from everywhere, especially youngsters,
caused other organization to suffer from the lack of educated and trained employees.
Especially the main rival of McDonald’s, the KFC, which has almost the same revenue capita
and also same competition skills, has suffered from the lack of skilled employees. However,
the lower level restaurants are the real victims of this scenario. For instance, Walmart needs
to hire employees for its restaurant to serve food for the customers. But due to lack of skilled
employees and hot competition of restaurant chains, it is unable to retain its skilled
employees and either the employees will turnover. Also, other organizations such as like
Starbucks which is known by its well served customer satisfaction, has suffered from the
excessive recruitment of employees in the market. Also McDonalds pays minimum wage for
its employees and stuffs compared to other organizations which can cause the employees
either leave the workforce or turnover in other organizations. This may seem an advantage to
other organizations but employees are less likely to work again in the fast food restaurant
chains due to common low salary in the field of workforce.

McDonald has caused to bring the bad image on the food. The fast food is not healthy and
causes food addiction which can lead to numerous of health problems such as obesity,
diabetes, depression, digestion issues, heart disease, cancer and early death. That’s why it’s
recommended to consume as least as possible of the junk food. But the popularity of
McDonald’s junk food among the countries has caused lots of health problems to grow and
people have lost control.

The main reason for the unhealthy of the McDonalds fast food is the way the food are
prepared. They are chemically processed in order to change the flavors and taste or change
the size of the food. This caused the chemical elements to grow excessively among the fast
food restaurants. McDonald’s has specially contributed to this problem. On the contrary,
McDonald’s competitive market in business area has lots of countries to increase its fast food
restaurants in order to satisfy people needs. As the demand for the fast food organization
increases, the competition also increases among the fast food restaurants. This leads to
another problem among countries as it forces countries to increase its importing more of fast
food restaurant organizations from the other countries like U.S.A . . . . (Stern, N., 2008)

Another main problem caused by McDonalds is the global warming. One of the biggest
problems caused by McDonald’s is negative impact on the setting is global warming ensuing
from greenhouse emission emissions from cows further as damaging the woodland for raising
kina and grains (Grossman, 2013). For one issue, alkane emitted from Bos Taurus could be a
major contributor of worldwide warming. McDonald’s, together of the world’s largest emptor
of beef, is exploitation 350000 Bos Taurus a year. With such a large amount of cow’s
physiological reaction all day, they may turn out a substantial quantity of greenhouse
emission. Within the kingdom for instance, four-dimensional of the carbon emissions are the
gas emitted by stock (Day, 2010). For an additional, McDonald’s is inflicting the
deforestation within the rain forest. McDonald’s usually gets its meat for its burgers by its
own privatized farms. These privatized farms, however, are being cursed for not
environmentally as a result of the farmland they wont to bear the Bos Taurus used to be a
lush woodland (Ecologist, 2010). Additionally, trees within the woodland are weigh down for
agricultural to grow grain for the stock and poultry (Chew, 2001). In step with NGO,
McDonald’s feed the chickens with the soybeans mature within the Amazon woodland as a
result of those soybeans are cheaper (Astor, 2006). Therefore, McDonald’s isn’t solely
chargeable for greenhouse emission emissions however destroying forests that might
facilitate to deal with heating.

Concerning heating, McDonald’s build efforts to reducing its impact on deforestation and
carbon emission. Foremost McDonald’s promise to not obtain legume fully grown in
Amazon forest (Greenpeace, 2006). Deforestation for legume farming and cows farming in
Amazon is one major driver for heating. Studies have shown the connection between legume
production and deforestation rate in Amazon (Nepstad, martinet and Almeida, 2006).
McDonald’s approach to prevent victimization legume from Amazon may scale back forest
destruction and facilitate mitigate heating.
We recommend the McDonalds authorities to change the business strategy in the concerning
countries to reduce problems mentioned above in our research proposal. The following
procedures should be taken according to our research:

To make certain that it purchases meat from a property resource, McDonald’s may produce a
code of conduct on however it choosing suppliers. By creating a code of conduct,
McDonald’s may have a transparent commonplace on the necessities its suppliers ought to
meet. Being stricter on selecting suppliers that contribute less to greenhouse gases and
deforestation would facilitate McDonald’s lowering its impact on warming. McDonald’s has
to additionally invest in analysis and support its provider to adopt alternative practices that
are helpful in cutting emission from placental and pasture since the suppliers have restricted
monetary resource in developing new techniques. With the exception of victimization new
technology, carbon sequestration in ground, modification in cattle’s diet and agroforestry
may have long-run advantages in reducing agriculture and livestock’s contribution to
warming. 1st of all, carbon sequestration in ground has nice potential in mitigation of the
impact of placental production. This methodology will be done by planting established
pasture like Brachiaria. It’s calculable that Brachiaria will capture and store twenty nine.5
t/ha additional carbon than alternative pasture (Thornton and Herrero, 2009).

So as to scale back packaging waste, victimization reusable containers and giving incentive to
client to supply their own cups could also be 2 choices for McDonald’s. McDonald’s may
additionally supply discounts to encourage customers to supply their own drink bottle or low
cups. As an example, shoppers shopping for low in Starbucks can have a ten-cent discount if
they bring about their own cup. Moreover, Aydinliyim and Pangburn (2012) indicate that
such campaign may facilitate firms to extend profit. With the introduction of reusable
containers and promotion, McDonald’s is feasible to earn additional whereas reducing waste
at a similar time.
Methodology

The objective of this study is to evaluate the performance of McDonald’s .This study deals
with the empirical analysis by the use of panel data on profitability of McDonald’s.
Reviewing and studying multiple published papers had been used to evaluate and measure the
performance of McDonald’s.

The data is from the period starting from 2017 and ending in2018 for five countries

(Malaysia, UK, Egypt, Qatar and Turkey).the data which is being shown begin from review
of McDonald’s customers all around the world and McDonald’s strategic analysis and what
are the opportunities and threats that affect organization goals. And we compared the results
between McDonald’s and other fast foods service providers.

Opportunities of McDonald’s:
 Developing the product:
As population trend in needs and demands are rapidly changing and creates opportunities for
menu development. So McDonald’s needs to prepare and provide those menus as per want
and taste of customers and should provide healthier products. As the new generation is highly
economic and health conscious. If McDonald’s want to attract new customers to generate
high sales the company needs to design low cost items in menu.
Market expansion in Asian markets:
China and Indonesia are among the rapidly growing in the world which its people are more
quality continues and they bothered major markets which can penetrated deeper.

Threats of McDonald’s:
 Legal compliance:
Every region has their own domestic compliance team which duties are more concerned for
health, safety and mostly on quality of product. As compliance are growing in this century in
case of high level politician of globally businesses.

 Heavy competition:
Competition is the main source of developing the product and providing better services than
competitors. As competition in every market are rising it has led to higher costs for
companies in market and customer service costs for brands. So each brand adapting new
strategies like sales, discounts, to capture and attract more and more purchasers. Which these
newly strategies and advertisement of competitors has led the McDonald’s to increase its
development cost and to expend larger amount of money for its brand.

Management structure:
More than 91% of McDonald’s restaurants are operating in franchise based and the company
wants to improve it to 94% percent so this brings problems, control and management issues
for McDonald’s.

 Rising health consciousness and health related criticism:

As an individual I will not recommend to eat oily and junk food. And as a far health issues is
rising and people around the globe wants healthier food and affordable food. So if we look
back to McDonald’s background we will find out that McDonald’s is famous for it’s heavily
calories menu and quality related negative reviews for its unhealthy food. So such relevant
concerns can damage the brand image, and also can lower the sales of product so the top
authority in McDonald’s needs to focus toward the healthy and quality menu which
customers can afford to buy. But if McDonald’s faces any economic depression or if their
foods are receiving criticisms they rely on their lager amount of loyal customers to rebuild
itself.
 Reviews of customers
resource worth able rare inimitable inimitable implications
Brand image yes yes yes yes Competitive
advantage
HR culture yes yes no yes Temporary
advantage
Loyalty yes yes no yes Temporary
customers advantage
Supply chain yes yes yes yes Competitive
advantage

Traveller Traveller Time of year language

 Reviews of travellers
ratings type
Excellent(16 solo march English
)
Very couple April English
good(19)
Good(10) business may Spanish
The review was gathered from 83 travellers:

McDonald’s /vs competitors

McDonald’s have lots of competitors including (burger king, dunking, dominos, and subway
and pizza hut) but MacDonald have competitive advantage over its competitors and they are:

1. McDonald’s knows its customers wants, demand, need.so they try their best to
provide them better services. Also McDonald’s implement 4ps of management like
(price, product, promotion, place) to better serve customers. They are lowering their
price to increase their sales and they are raising their quality of foods and them
placing their product in to those area in which people can visit and purchase easily.

2. Its largest welfare over other competitors is the brand image or name recognition-self-
explanatory.

3. Detail “System” and processes - they have all written down to how much oil
should be consumes in the deep fryer down to the ounce and how the oil must be
changed based on the amount of fries, chicken nuggets, and chicken tenders are
cooked down to the ounce. They have their daily timetable for everything
planned down to the individual minute - when to open, when to begin coffee,
when to start grill, fryer, etc.
4. Excellent Training - McDonald’s has heavy staff resource turn over, so they have
to be very good in training to support their stores and the stores of their
Franchisees.
5. Job commitment of their employees is another factor of their competitive
advantage.
 Many fast food hotels prefer and serve those food which are mostly same with other
restaurant menu. They lowering their menu price down and the customer which
targeting is also the same? So every company needs to different things that varies
from others to win competitive advantage. This is what has given McDonalds its
competitive position over other fast food chains. That’s why its profit is raising then
its rivalry in global market like its profit in 2017 and 2018 which is being mentioned
in below:

McDonald’s performance of profitability:

Chose financial data DEC 31 2018 Dec 31 2017

11,786,000 22,025,200
Gross profit 52% 47.1 %

2018 calculation

Gross profit = 100 × gross margin ÷ revenues

11786000÷22,025,200= 52%

McDonald’s Value Chain Analysis

Macdonald value chain have a analytical structure which mostly assist and corporate in
identifying business activities that can create value with all of its meaning and competitive
advantage for the global fast food restaurants. Figure 1.a below shows the value chain
analysis:

Macdonald Primary Activities

  MacDonald Inbound logistics
Macdonald has more six hundred suppliers globally and the company’s supply chain includes
more than two thousand suppliers in various industries across the world. The majority of
MacDonald suppliers are based in Europe and accordingly, 73.4% of its supply-chain
expenses occur in Europe. This is followed by Americas (27.8%), Europe (44.4%) and other
places. In order control inbound logistics aspect of the business more effectively, MacDonald
owns a number of logistics firms as its subsidiaries

 McDonalds' Operations
Macdonald is a multinational company that operates 38 production bases in 112 countries
around the world. More than 36,000 restaurants around the world serve 69 million people
every day.
Figure 1.b below illustrates the full scope of MacDonald global network of operations.
Conclusion

In our research, we have gathered many information and details using valid methods to analyze the
influence of the one of the major organizations of food industry. McDonalds have had enjoyed a
superior impact on the economic science of the assorted countries in which McDonald’s is such an
enormous contributor to the economy is as a result of this corporation accepts food stamps.
McDonald’s successful economic influence on the market has caused unemployment in other
organization in its restaurant chains especially in employee recruitment. However our analysis
realized that McDonalds Corporation has caused several alternative state into other firms by recruiting
most of native staff for the organization. McDonald’s executives have same they introduced too
several things too quickly last year, like Wraps and therefore the choice to substitute egg whites for its
breakfast sandwiches. Packaging waste is another environmental drawback McDonald ought to tackle
with. McDonald’s use plenty of inessential packing every day. So basically, problem statement
indicates that the McDonalds’s organization influences many countries which can cause various
problems such as; unemployment of labor among other organizations, excess food waste, bad food
image, extreme competition, causing global warming and many more. McDonald has caused to bring
the bad image on the food. The fast food is not healthy and causes food addiction which can lead to
numerous of health problems such as obesity, diabetes, depression, digestion issues, heart disease,
cancer and early death. One of the biggest problems caused by McDonald’s is negative impact on the
setting is global warming ensuing from greenhouse. We recommend the McDonalds authorities to
change the business strategy in the concerning countries to reduce problems mentioned above in our
research proposal. The following procedures should be taken according to our research:
To make certain that it purchases meat from a property resource, McDonald’s may produce a code of
conduct on however it choosing suppliers. By creating a code of conduct, McDonald’s may have a
transparent commonplace on the necessities its suppliers ought to meet. Being stricter on selecting
suppliers that contribute less to greenhouse gases and deforestation would facilitate McDonald’s
lowering its impact on warming. McDonald’s has to additionally invest in analysis and support its
provider to adopt alternative practices that are helpful in cutting emission from placental and pasture
since the suppliers have restricted monetary resource in developing new techniques. With the
exception of victimization new technology, carbon sequestration in ground, modification in cattle’s
diet and agroforestry may have long-run advantages in reducing agriculture and livestock’s
contribution to warming. So as to scale back packaging waste, victimization reusable containers and
giving incentive to client to supply their own cups could also be 2 choices for McDonald’s.
McDonald’s may additionally supply discounts to encourage customers to supply their own drink
bottle or low cups. The McDonalds had enjoyed a critical influence with major impacts especially on
economics of the countries, McDonalds had caused many more both positive and negative impacts on
the environment especially on food industry business causing employment and also other problems
such as health problems, global warming and plastic waste.
References

http://www.aboutmcdonalds.com/mcd/our_company.html.

"McDonald’s Environmental Issues." All Answers Ltd. ukessays.com, November 2018. Web. 20
November 2019.

https://www.ukessays.com/essays/environmental-studies/mcdonalds-environmental-issues.php?
vref=1.

Essays, UK. (November 2018). McDonald’s Environmental Issues. Retrieved from

https://www.ukessays.com/essays/environmental-studies/mcdonalds-environmental-issues.php?
vref=1

"McDonald’s Environmental Issues." UKEssays.com. 11 2018. All Answers Ltd. 11 2019

https://www.ukessays.com/essays/environmental-studies/mcdonalds-environmental-issues.php?
vref=1

<ref>{{cite web|last=Essays |first=UK |url=https://www.ukessays.com/essays/environmental-

studies/mcdonalds-environmental-issues.php?vref=1 |title=McDonald’s Environmental Issues |
publisher=UKEssays.com |date=November 2018 |accessdate=20 November 2019 |
location=Nottingham, UK}}</ref>

All Answers ltd, 'McDonald’s Environmental Issues' (UKEssays.com, November 2019)

<https://www.ukessays.com/essays/environmental-studies/mcdonalds-environmental-issues.php?
vref=1> accessed 20 November 2019

McDonald, B. (2014a). Assessment in Early Childhood Care and Education: ISBN 978-3-659-52519-3,
Lambert Academic Publishing (LAP) AG & Co. KG, Saarbrucken, Germany.

McDonald, B. (2014b). How to Train Your Students for Entrepreneurship: ISBN 978-3-659-27520-3,
Lambert Academic Publishing (LAP) AG & Co. KG, Saarbrucken, Germany.

McDonald, B. (2014c). Enjoying Mathematics in the Flipped Classroom: ISBN 978-3-8484-1858-9,

Lambert Academic Publishing (LAP) AG & Co. KG, Saarbrucken, Germany.

McDonald, B. (2014d). Learning to Love and Loving to Learn Mathematics. ISBN 978-3-659-51936-9,
Lambert Academic Publishing (LAP) AG & Co. KG, Saarbrucken, Germany.