Globalization in Recession/Recovery 2010 - Research Paper Example

McDonalds Corporation is a fast food giant operating from Illinois, United States. Based on franchise model, McDonalds serves around 58 million customers on a daily basis with the help of its 31000 + locations worldwide and workforce of more than 400,000. Other companies and newly formed corporations try to imitate the business strategies of McDonalds in their global operations which have always been successful. Its success is attributed to its flexible supply chain, better management control and effective human resources management.

Many global organizations were severely hit by the global meltdown of 2009. McDonalds was among one of them which was exposed to increased costs of production and declining sales during the recession period. As economic crisis soared, purchasing power of consumers declined. Fuel and transportation costs increased and there was an overall shift in consumer buying behavior and preferences (DDB n.d). Slowed economy was directly reflected in McDonald’s stock which fell down by 7 percent (CNN Money 2008).

Higher inflation in food and fuel prices lead to consumers changing their eating habits and turning to cheaper alternatives. Anti-obesity drive across nations also placed questions on business and ethical practices of the company. However, the sheer size of the company once again allowed it to sail back into the global waters. Through aggressive marketing and advertising strategies, changing its value propositions and global experience, McDonalds rebounded with profits increased by 10 percent (Market Watch 2010).

Investors also have high trust and optimism with the company as it did not post much losses and fear of bankruptcy like other multinationals. Even its stark competitors- Burger King and Wendy’s are not able to replicate the recovery demonstrated by McDonalds (Bloomberg Businessweek 2010). Globalization has resulted in manifold