Mcdonald'Scorporatereport

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McDonald’s Corporation

Corporate Report

McDonald’s Corporation: Executive Summary With over 30,000 restaurants operating in more than 100 countries worldwide, McDonald’s is able to serve 52 million customers per day, undoubtedly laying claim to the leading global foodservice retailer. Priding itself on its well-known products, such as the Big Mac and Egg McMuffin, McDonald’s was able to generate 2007 revenues of $22.8 billion, a record high in the 54-year history of the fast-food franchise. As a strong competitor in the global market, McDonald’s Corporation constantly faces the test of not only improving its profitability, but also its social and environmental performance. Recently, McDonald’s has embraced the globalization trend that is sweeping multinational corporations all over the world, and is taking large steps in tailoring its products and services to the demands of its local customers. Beginning with its introduction of computerized point-of-sale systems over 30 years ago, McDonald’s continues to effectively utilize advancements in technology to improve its overall operation efficiency. Perhaps the most powerful force affecting McDonald’s Corporation’s lines of business today is sustainability and the recent “green” movement that is at the forefront of its social responsibility and values system. In this report, we will analyze three major trend that are affecting McDonald’s’ operations and reputation and discuss how the corporation is adapting to these forces in the global market.

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Globalization McDonalds is a prominent global force and symbol of globalization. It was one of the first companies in the fast food industry to globalize, which has had positive and negative impacts on the company. McDonald’s initial strategy was to take their standardized American practices to foreign countries. This strategy was met with resistance which forced the company to move to an internationalization strategy where they adapted their products and customer service to the domestic country (Heer and Penfold 1). For example, McDonalds introduced “Aunt and Uncle McDonald” in China because of the country’s emphasis on family values (Heer and Penfold 1). In Russia, McDonalds hired hosts to help customers adapt to the fast food environment, which previously did not exist in this country (Bryman 154). However, because of their initial unsuccessful globalization strategy, McDonalds faced cultural clashes and protests in many locations. Japan has criticized McDonalds for increases in national obesity, and Dinan and Millau have suffered protests on McDonalds’ stores as a symbol of unwelcome globalization (Spano 7). As a method to keep costs low, McDonald’s maintains their production strategies when they enter new countries but frequently adapts product choices and service to the predominant practices of the hosting country. McDonald’s was one of the first companies to value the importance of local cultural practices and traditions. This has allowed them to adapt the theory of internationalization, which is more readily accepted than that of standardized globalization. In fact, internationalization has become so engrained in McDonald’s culture that they’ve developed the term “McDonaldization,” which is the “the process by which the principles of the fast-food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world” (Heer and Penfold 1). One of the most visible examples of McDonald’s adaptation to local food preferences is its change of menu items to conform to local food availability. On the Canadian east coast, where lobster is readily available, McDonald’s has developed the McLobster, which is a lobster salad sandwich. In Quebec, McDonald’s offers a local favorite, French fries topped with gravy and cheese curds. In Egypt, the McFalafel responded to local food preferences, and in Finland, the McLuks salmon burger is preferred over beef burgers (“Studying McDonald’s...
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