McDonalds and Its Global Impact - Essay Example

McDonald’s and its Global Impact of the of the McDonald’s and its Global Impact Logo of McDonald’s The Redoubtable and Ubiquitous Big Mac (McDonalds, 2014). Introduction The travel and tourism industry is comprised of a number of subsidiary sectors. Among these, air travel, accommodation, and food services constitute half of the total output. Specifically, food services is a subsidiary sector that is the second largest. It constitutes more than 16% of the travel and tourism industry’s output (Select USA, n.d.). McDonald’s constitutes the leading global foodservice retailer. It has a vast network of restaurants, approximately 35,000, which serve around 70 million people in 100 countries every day. The business of this firm is distributed over distinct geographic segments. These segments include the US, Europe, Asia-Pacific region, Middle East, Africa, Canada, and Latin America (McDonalds, 2014). Thus, tourists to other nations, as well as within a country can procure McDonald’s products in a number of locations. Brief History of McDonald’s In the year 1948, the first McDonald’s was commenced in San Bernardino, California. The owners Mac and Dick McDonald entered into a franchise agreement with Ray Kroc, in the year 1954. After a year had elapsed, Kroc started his first restaurant in Des Plaines, Illinois. Kroc proved to be highly enterprising, and by the year 1957, he established 14 McDonald’s restaurants in California, Indiana, and Illinois. Finally, in the year 1961, Kroc acquired McDonald’s from Dick and Mac for $2.7 million (Research and Markets: SWOT & PEST Analysis of McDonalds and Profiles of their Competitors Burger King and Yum!, 2008). Additionally, McDonald’s is distinguished by its Golden Arches, and these made their debut in the year 1962. In the very same year, this distinguished company sold its billionth burger. In the year 1963, Ronald McDonald came to the fore, and McDonald’s brought in its first new item, namely the Filet-O-Fish. This company became a public company in the year 1965, and commenced to advertize its products on the television. In the year 1967, McDonald’s commenced operations abroad, and this was in Canada. The Big Mac was made a part of its menu, in the year 1968, and in that year it opened its 1,000th restaurant (Research and Markets: SWOT & PEST Analysis of McDonalds and Profiles of their Competitors Burger King and Yum!, 2008). The Big Mac and the McDonald’s Golden Arches are well recognized across the globe. Their services offer delicious fast food items and soft drinks to the populace. The annual expansion of McDonald’s, in the 1970s, was approximately 500 restaurants. The advent of the Ronald McDonald House, which provided temporary residence for the family members of hospitalized children, was opened in the year 1974. In the year 1975, the drive through window made its debut. Subsequently, in 1983, Chicken McNuggets were introduced. In the year 1984, Kroc expired after making this corporation the best in its genre (Research and Markets: SWOT & PEST Analysis of McDonalds and Profiles of their Competitors Burger King and Yum!, 2008). With its innovative and eye-catching products, McDonald’s has produced a tremendous and lasting impact upon tourism across the world. Despite the seeming lack of intricacy, innovation in the food industry does entail the presence of a special type of practical genius. With its distinctive innovative skills, McDonald’s has achieved steadily increasing sales and profits in the fast food industry. This is no mean feat, as this industry has been considered by many to have reached a saturation point as far back as the 1980s (Fontinelle, 2010). McDonald’s outlets and restaurants are on the increase, and this is not limited to any particular nation or city. This phenomenon is truly worldwide. As such, McDonald’s services have benefited many tourists across the world. Corporate Officers A few of the corporate officers of McDonald’s are described in the sequel. Jose Armario, is an Executive Vice President who is responsible for worldwide supply chain, development and franchising. He has been holding this important post from October 2011. During his 17 years’ service with McDonald’s he has worked in various capacities, such as President for the Latin America area, and Group President for Canada and Latin America (United States Securities and Exchange Commission, 2013). As a renowned international supply chain developer, Armario has proved to be of great value to McDonald’s. Armario’s expertise have proved to be of great benefit in the global expansion of McDonald’s. The Corporate Executive Vice President and Global Chief Brand Officer post is occupied by Stephen J Easterbrook. He has been functioning in this capacity from June 2013. Prior to this he had served as the Chief Executive Officer of Wagamama Limited, and the Chief Executive Officer of PizzaExpress Limited. Moreover, he had held the position of European President of McDonald’s. Easterbrook’s vast administrative experience in the fast food industry is of significant benefit to McDonald’s (United States Securities and Exchange Commission, 2013). In addition, his experience has improved the global impact of McDonald’s. Another important functionary of this company is Richard Floersch, who is the Chief Human Resources Officer and Corporate Executive Vice President. Floersch had been working in McDonald’s since November 2003. Prior to that he had been a Senior Vice President of Human Resources for Kraft Foods. Floersch brings a wealth of human resources management knowledge, skill and experience to McDonald’s (United States Securities and Exchange Commission, 2013). This skill has helped McDonald’s to successfully motivate its employees, across the world, and to induce optimal performance in them. In other words, Floersch’s acumen and knowhow have produced a global impact upon McDonald’s personnel and their functioning. In addition, since, October 2011, Douglas M Goare, has discharged the functions of President, McDonald’s Europe. Before taking up this position, he had served as the Corporate Executive Vice President of Supply Chain and Development (United States Securities and Exchange Commission, 2013). Global Impact With regard to the Fast Food Hamburger Restaurant industry, McDonald’s enjoys the dominant position. The major share of the market, in this area, belongs to this company. This market has been estimated to be worth $67 billion. The second place, in this market, has been conquered by Burger King with a 4% share. This is depicted in the pie chart below (McDonalds Corporation, n.d.). This is one of the examples of McDonald’s global impact. (McDonalds Corporation, n.d.). Competitors In the 1900s and 2000s, the Fast and Convenient campaign was undertaken by McDonald’s, which transformed it into an updated and more natural dining environment. Subsequently, salads, fruits, and carrot sticks were added to the bill of fare, in order to make it more healthy and natural. Contemporary McDonald’s restaurants offer health drinks and high quality coffee. This has rendered it an organization that has little if any competition. The main competitors of McDonald’s are; Burger King Corporation, Subway, Starbucks, and YUM Foods (Mourdoukoutas, 2013). It is this zeal for constant innovation that has allowed McDonald’s to achieve its predominant position in the world and to retain it. Effect of McDonald’s on the Ecology In order to reduce the harm caused to the environment, McDonald’s has undertaken a replacement exercise, whereby paper cups are to be substituted for the current polystyrene cups. This exercise is being conducted across the US in some 2,000 odd restaurants. These paper cups will be provided to customers ordering hot beverages and will be double-walled (Shreeves, 2012). Paper undergoes decomposition, much faster and more completely than polystyrene. The concern for the ecology exhibited by McDonald’s has been recognized across the world, and many companies in the travel industry have attempted to emulate it. Eco-friendliness of McDonald’s Sustainability in individual locations has been explored by McDonald’s. For instance, the Leed Gold certificate was awarded to its first green restaurant in Chicago. Moreover, one of its restaurants in North Carolina has a ChargePoint stations for electric vehicles. Furthermore, in Argentina, Brazil, and Chile, around 270 McDonald’s restaurants deliver used oil for conversion to biodiesel (Schwartz, 2009). The need of the hour is sustainability, and McDonald’s has established its credentials, in this context, on account of its creative thinking and action. However, criticism has been levelled against some of McDonald’s practices. For instance, many people have expressed misgivings regarding its packaging. In addition, PETA has accused McDonald’s of slitting the throat of live poultry and then plunging them in boiling water. There have been no efforts on McDonald’s part to refute these allegations. Since, its chief sales are meat based products, McDonald’s cannot claim to be eco-friendly. This is due to the fact that an average Holstein cow produces around 400 pounds of methane per year. As such, cows are responsible for 18% of the greenhouse gas emissions, thereby making the meat industry a leading contributor to climate change (Schwartz, 2009). McDonald’s and Carbon Neutrality McDonald’s had embarked upon creating sufficient fuel from its waste oils, in order to provide energy for its 155 delivery vehicles. The remainder of such fuel was to be sold in the market. Such fuel was to consist of 15% virgin rapeseed oil and the remainder was to be waste vegetable oil. With improved refinement, McDonald’s was sanguine regarding the removal of virgin rapeseed oil from the process (Green, 2007). The use of the aforementioned oils as fuel has clearly demonstrated McDonald’s concern for achieving carbon neutrality. Sustainable Activities Undertaken by McDonald’s The Sustainable Agriculture Initiative Platform Beef Working Group is chaired by McDonald’s. The objective of this group is to establish an all-inclusive system for sustainable beef production in Europe. Efforts are being undertaken by France, Germany, Ireland, and the UK to reduce greenhouse gas emissions from beef production (McDonalds, 2014). The major consumers of beef across the world, are being induced by McDonald’s initiatives, such as those cited above. In addition, McDonald’s is a member of a number of organizations that are involved in promoting sustainable beef. For instance, it participates in GTPS – the Brazilian Roundtable on Sustainable Livestock. Moreover, it is a founding member of the Canadian Roundtable for Sustainable Beef. Furthermore, it has actively participated in the Cattle Council of Australia Rising Beef Champions Initiative. In addition, active collaboration has been undertaken by McDonald’s USA with the National Cattlemen’s Beef Association, in order to promote sustainable production of beef (McDonalds, 2014). McDonald’s has made a number of efforts to promote sustainable beef. The effects of these moves can be witnessed across the world. Conclusion McDonald’s made optimal use of globalization by conveying the American Way of Life to many regions of the world. However, it ensured adaptation to the social context of these areas by franchising to local entities. Despite the criticism levelled against it for increasing greenhouse gases emissions, McDonald’s has consistently endeavored to make the business eco-friendly, and more sustainable. As such, McDonald’s has emerged a corporate giant in the food industry, and it caters to the needs of the tours and travels industry. References Fontinelle, E. (2010, April 14). McDonalds: A History Of Innovation. Retrieved July 27, 2014, from http://www.investopedia.com/financial-edge/0410/mcdonalds-a-look-back.aspx Green, H. (2007, July 5). McDonalds Grease Powering McDonalds Trucks. Retrieved July 27, 2014, from ecogeek: http://www.ecogeek.org/content/view/774/ McDonalds. (2014). Company Profile. Retrieved July 27, 2014, from http://www.aboutmcdonalds.com/mcd/investors/company_profile.html McDonalds. (2014, April 30). Our Journey Together for Good. Retrieved July 25, 2014, from http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/2.0/pdfs/2012_2013_csr_report_executive_summary.pdf McDonalds Corporation. (n.d.). Retrieved July 27, 2014, from wikinvest: http://www.wikinvest.com/stock/McDonald%27s_Corporation_%28NYSE:MCD%29 Mourdoukoutas, P. (2013, April 25). Starbucks And McDonalds Winning Strategy. Retrieved July 27, 2014, from Forbes: http://www.forbes.com/sites/panosmourdoukoutas/2013/04/25/starbucks-and-mcdonalds-winning-strategy/ Research and Markets: SWOT & PEST Analysis of McDonalds and Profiles of their Competitors Burger King and Yum! (2008, June 13). Business Wire. Schwartz, A. (2009, September 2). Is it green?: McDonalds. Retrieved July 27, 2014, from inhabitat: http://inhabitat.com/is-it-green-mcdonalds/ Select USA. (n.d.). The Travel, Tourism and Hospitality Industry in the United States. Retrieved July 26, 2014, from United States Department of Commerce: http://selectusa.commerce.gov/industry-snapshots/travel-tourism-and-hospitality-industry-united-states Shreeves, R. (2012, March 23). McDonald’s ditches Styrofoam … maybe. Retrieved July 27, 2014, from ecorunner: http://www.ecologyrunner.com/2012/03/mcdonalds-ditches-styrofoam-maybe.html United States Securities and Exchange Commission. (2013, December 31). McDonalds Corporation. Retrieved July 27, 2014, from http://secfilings.nasdaq.com/edgar_conv_html%2f2014%2f02%2f24%2f0000063908-14-000019.html#MCD-12312013X10K_HTM_SAD62A4F3207BBDBFA33D0AB77EF906EE Read More