Key Sustainability Challenges for McDonalds - Case Study Example

Responsible Business Table of Contents Introduction 3 Key Sustainability Challenges for Mc Donald 3 Mc Donald’s Strategy in Addressing Challenges 3 Organizational Approach in Responsible Marketing and Advertising 4 Proclamation for Company Assurance 4 Mc Donald’s in Addressing Advertisement Complaints 5 Organizations Approach in Addressing Ethical Issues 5 The Ethical Issues Harming Big Business Internally 6 Conclusion 6 7 Reference List 8 Introduction Mc Donald’s happens to be one of the leading global food service retailers with locations around 36,000 and serving over 69 million customers in approximately 100 countries per day. Worldwide, more than 80% of the Mc Donald’s restaurants are owned and are operated by local business men (Cray, 2009).Their objective is to become a favourite place for customers and be the way to eat and drink by portioning core favourites of people through their famous food items like Fries, Big Mac, Quarter pounder and chicken Mc nuggets. Their belief is their franchisees and supplies are the key to the company’s success. They power their system for making themselves able to categorize, range and execute ideas that can successfully gratify customer’s desires and preference (Kotler, 2011). They spotlight optimizing their carte du jour, modernizing the experience of customers and increase the brands accessibility within their structured plan. The objective of the study is to identify the key sustainability challenges as identified by the company itself and what are the strategies of the organization to deal with it. To evaluate the organizations approach towards responsible marketing, advertising and how they deal with the ethical issues. Then finally evaluate how the company understands its corporate social responsibility. Key Sustainability Challenges for Mc Donald Mc Donald’s is one of the fast food giants that faced various sustainability challenges which are identified by the organization itself. They tend to analyze that their customers are concerned about where the product derives from, the process of sourcing them, and if they decide to purchase what will be its economic, ethical and environmental impact. In addition to that there are some significant global issues like changes in demand for the recourses of an expanding population which needs to be dealt with. They realized that such challenges should be combated with, for gaining competitive advantage. Another challenge faced by that needed to overcome was to source sustainable beef. A criticism was faced by Mc Donald’s by the green groups over its gigantic global demand for meat, which is carbon intensive and the impact of it on environment. They are asked to cut the carbon emissions to a large extent. Mc Donald’s is also considered for being the largest generator of garbage (Isler, Popper and Ward, 1989). Another sustainability problem from the company’s point of view is incinerators engender opposition arising from neighbours, inspite of that the company attempts to do well in monitoring the hoard gasses and ashes and check for detrimental residues for maintaining a healthy surrounding. Another sustainability issue is that, Mc Donald is found to be generating polystyrene packaged hamburgers in large number every minute (Fast food targeted marketing, 2013). Banning plastic bags would turn out to be anti market, rudimentary and intrusive and hence the company decided to come up with an effective solution to deal with such problems. Mc Donald’s Strategy in Addressing Challenges Mc Donald’s unveiled its strategies in addressing sustainability challenges. The company is making tremendous efforts in sourcing their beef from sustainable sources that are certified and pledges to source coffee, fish and palm oil from fully sustainable certified sources and are focused to produce fibre based packaging that are environment friendly (Story, 2004). The company made a decision to undertake an overhaul of how it could track environment and sustainability metrics for ensuring that is making a brilliant attempt towards achieving its new set targets. The company committed to increase the energy efficiency to a large extent in companies owned restaurants. To meet the mounting demands of the customers, for reducing the risk of interruption in the long term supply and to maintain sustainable growth of the economy, the company is making attempts to reduce the operating costs very efficiently. They are also taking necessary steps in controlling the carbon emissions. They made a tremendous contribution towards waste management by shipping frozen concentrate which reduces the requirement of excess packaging of the juices. Mc Donald’s used to ship soft drinks in cardboard containers but now the cold drinks are delivered through trucks that directly pump it to the receiving tanks at the local restaurants (Carrol and Shabana, 2010). In such a case there is no need of packaging at all. They believe bringing in such changes, and addressing these sustainable challenges will change the world for its improvement and hence company can ensure that their business representation is endurable and lucrative. Organizational Approach in Responsible Marketing and Advertising Responsible marketing and advertising is a relevant concept which every company should take into consideration for understanding that they should come up with best strategies for the betterment of the society. It is found out that Mc Donald’s is held responsible for 99 percent of the fast food advertisements meant for kids and the efforts of the industry in self regulating their promotional activities proved to remain ineffective. Mc Donald’s put more emphasis on giving away toys inspite of focussing on their food items in promotional activities for kids on television. This clears the fact that the industry does not stick to its self-abiding promises for child intended promotions (Brady, 2010). The company instead of focusing on their food product majorly focuses on its logo, brand and marketing by giving away free toys that may seem appealing to children. It clears the fact that these marketing strategies are industry owned which are potentially disingenuous and hence clear that they are not living up to their promises about promoting their diet to kids. Mc Donald’s in order to step up towards responsible marketing, took a pledge to stop targeting children below 12 years in their promotional activities and their advertisements (Hill and Langan, 2014). Mc Donald’s was restricted to mass advertising on television and newspapers have now expanded their restriction on advertisements to children to command responsible advertising (story, 2004). Proclamation for Company Assurance For being socially responsible and to spotlight on doing right things, company is initiating every strategy, as they feel it is their heritage to prove themselves as a socially responsible food chain. Being a business leader they took an action plan to be in a leadership role on the issues which serves to be important to their community. Mc Donald’s felt that they have been recognized as a responsible advertiser and hence took an initiative to maintain that in the upcoming years. They are strictly trying to stick on to the global standards for communicating to the young generation, which makes necessary for them to exchange a few words to kids balanced diet choices, encourage physical exercise and endow with the nutritional information about their diet and employ subject matter experts so that they can guide their hard work concerned to children and their families (Shimp and Andrews, 2013). Over the precedent years, they have lucratively responded to the concerns of the community around marketing to kids and have effectively abridged their advertisement during the forecast of children television programs. Mc Donald’s came up with the idea of Happy Meal Choices through which they help families to select one of their food options which can somewhat be a part of a healthy diet and still ensuring that the children are not deprived of their Mc Donald’s experience (Kotler, 2011). They ensured that their food products now contain reduced sugar and sodium. To make their diet healthy to some extent, they introduced vegetable oil blend which is almost free of trans fatty acids. Mc Donald’s in Addressing Advertisement Complaints Mc Donald’s agreed to promote their diet to children less than 14 years and only if the marketing communications comes up with healthier choices that satisfy the defined set of nutrition criteria for accessing meals for children. Mc Donald’s pledged that they would continue providing information regarding their nutritional profile or daily intake percentage on their food wrapping. Without approval from the school authorities, they never conduct any promotional activity in the school premises; instead they conduct activities promoting the relevance of physical activity or a healthy lifestyle. Moreover, Mc Donald’s have now decided to report their all advertising and marketing communications to the countries food and grocery council annually for public release (Mc spotlight, 2008). Organizations Approach in Addressing Ethical Issues Mc Donald’s is observed to be internationally growing and expanding with time. It is considered as registering its name among the world most ethical entities. Through in depth analysis, the company is found to be dedicated in maintaining organizational ethics and made efforts towards the growth of organization through corporate social responsibility. The company is questioned if it is using its resources responsively. The company is found to recourse from paper and animal products and production of farms. The company is realized to make developments in leadership issues pertaining to the company (Cray, 2009). Nowadays, the observation is focused on the newly arising issues of this tremendously successful entity. Mc Donald’s may seem cheap, convenient and clean but there exists many negative sides of the business. Inspite of the reality that the company’s employees are paid less and it negatively impacts other cultures, they successfully managed to position themselves as one of the positive pieces of America. The company is still continuing to make its image positive by delivering its customers greasy and unhealthy fries along with a jester named Ronald Mc Donald. The unethical practices of the company are not remained hidden but it does not appear to detract from the image of people that the company seeks to venture. The Ethical Issues Harming Big Business Internally Though Mc Donald’s efforts to support children in dealing with life threatening sickness but the diet that are being delivered to their customers results to obesity, heart ailments, asthma and even mad cow disease. They tend to forget the message they deliver to children regarding the importance of healthy eating habits. The Mc Donald’s Practices relating to its concern about environment also seems to be questionable. Unlike a fresh ground beef patty sourced from a local butcher shop, the patty used in typical fast food hamburgers contains meat deriving from various cattle that are raised from various other countries. This increases the possibility that the patty may contain contaminants whose origin is left unidentified. The company brings to use their grown genetically modified potatoes instead of collecting the potatoes that are grown locally. The practices of using food items derived from distant locations can seem to be problematic pertaining to the environment. From the perspective of public healthy public it is next to impossible to trace contaminated sources in beef sourced from multiple locations. The people who speak against Mc Donald’s are increasing in numbers. Controversy rose once relating to the Companies ethics. The controversy arose because of the bacon ranch salad. A family arrived at the restaurant and found a rat in their child’s salad that they offered to them. According to the reports of various newspapers, the family found a rat under a large lettuce leaf in a shared salad. Mc Donald’s seemed not even bothered to apologize to them (Fast food targeted marketing, 2013). They never even asked that the woman who consumed a part of the meal offered was in a good health or not. The women after undergoing too many health tests was found uninfected and for committing such a health threatening mistake sued the company for $1.7 million because of the dead rodent and also for their ignorance in responding. In addition to failing to realize its mistakes, Mc Donald’s decided not to cooperate throughout the course of the law suit which was put to get to the court. In order to address such ethical issues, the company is trying its best to resolve it so that the customers can portray its image positively in the ethical grounds. In addition to that, various laws, legal actions and even public pressure arising from the activists can contribute in resolving such issues. Even if the people are made aware about their products, ill effects on health and their practices that have harmful effects on environment, they can surely take a step of bringing a change. Conclusion Mc Donald’s is the leading fast food business chain and it operates worldwide serving a large amount of customers a day. Controversies over its packaging and marketing strategies to attract children towards their food items and some ethical dysfunction frustrated the company for some time. Being on the leadership position, it had a bothering history regarding waste management. Focussing on the environmental issue, the company initiated various strategies in solving the environmental problems caused by their generated waste. They limited the use of plastic bags in their packaging, limited carbon emmitions and took up many environment friendly strategies to limit the waste generation. The company also had to handle criticism for their junk food. In order to deal with that, they came up with some healthy diet options by maintaining a happy experience for children. Considering the dominance of Mc Donald’s in the market, it can be believed that it gains all the technical benefits through accessing its modern technologies. In order to meet the requirements of the competitive market, it focuses on dominating the market share by implementing various sustainability strategies, which helps the company to brilliantly create its loyal corporate image. Understanding the organizations employees, their perseverance and its efficient service ensures the success of the organization Ethical issues cropping up within the organization requires following from employees and the employee organization as well. People are very cautious about their health matters, thus it becomes crucial for leading food brand to hold on to its fine image in the customers mind and further improve the quality of its diet and standard besides its prices. Their main spotlight should be on producing low fat food items to support the concern of being a healthy individual. Initially, Mc Donald’s spend millions of dollars on the advertisement campaigns that targets solely on children that not only facilitated the consumption of junk food but also raised ample number of baneful consequences related to health (Donella Meadows Institute, 2010). The company was found being faulty on the ethical grounds by not sticking to their pledges regarding their corporate social responsibility. They dragged customers attention specially kids to make unhealthy food choices by promoting super size portions. Revealing such unethical behaviour will result to create a negative impact on the food chains reputation. Though Mc Donald’s took various steps in addressing such ethical issues, more effort should be made by the company to totally eliminate such sustainability challenges. In approach to their responsible marketing and advertising, they limited advertisements during the forecast of children programmes on television and understood the importance of not promoting junk food items to children (Steve and Samuel, 2014). To conclude, Mc Donald’s has effectively realized its responsibility towards society and works towards its betterment, still more steps are to be initiated by them in addressing their sustainability challenges and retain their brand image in competition to other leading fast food chains. Mc Donald’s had successfully deep-rooted its foundation of a sustainable global market. Based on how it is performing its business by initiating innovative steps concerned to social responsibility it can be assumed that its profit is on a secured position. Reference List Brady, D.L., 2010. Essentials of International Marketing. New York: M.E. Sharpe. Carrol, A.B. and Shabana, K.M., 2010. The Business Case for Corporate Social Responsibility. International Journal of Management Reviews, 2(3), pp 1468-1475. Cray, C., 2009. The Corporate Social Performance. Multinational Monitor, 4(1), p. 6. Donella Meadows Institute, 2010. Good or Bad Environmental Marks for Mc Donald’s. [online] Available at: [ Accessed 6 April 2015]. Fast food targeted marketing, 2013. Fast Food Marketing Targeting Children. [online] Available at: [Accessed 6 April 2015]. Hill, R.P. and Langan, R., 2014. Handbook of Research on Marketing and Corporate Social Responsibility. Northampton: Edward Elger Publishing. Isler, L., Popper, HT. and Ward, S., 1989. Childrens Purchase Requests and Parental Responses: Results From A Diary Study. Journal of Advertising Research, 1(2), pp 28–39. Kotler, P., 2011. Doing The Most Good for Your Company and Cause. Beijing: John Willey & Sons. Mc spotlight, 2008. What’s Wrong With Mc Donald’s? [online] Available at: [Accessed 6 April 2015]. Shimp, T. and Andrews, J.C., 2013. Advertising Promotion and Other Aspects of Integrated Marketing Communications. Lorong Chuan: Cengage Learning. Steve, G. and Samuel, H., 2014. Small Business Marketing Strategy Based on Mc Donald’s. Proceedings of Asbbs, 21(1), p. 89. Story, M., 2004. Food Advertising and Marketing Directed at Children. International Journal of Behavioural Nutrition, 1(3), pp 1479-5678. Read More