18 Apr 2022


McDonald’s And Its Global Market Challenges

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McDonald's is among the leading fast food restaurant chains globally. They operate 37,855 eateries in 120 nations and territories across the globe, serving 68 million clients daily. The key to the successful and fast global expansion of the restaurant is the franchise model the company established. In its initial stages, the restaurant recognized that international market needed an exceptionally high level of local responsiveness and that it required to manage corporate spread throughout various regions efficiently and effectively, which could be attained only via a transnational approach. The company's value chain was created considering the political, political, economic environments and local culture. McDonald's has established an international empire founded on its products' consistency. The restaurant has been able to remain relevant in the global market by being able to successfully address the various challenges which it has been facing in the global scene, especially the sociocultural, legal-political and ethical issues. 

Sociocultural Issues

McDonald's had to deal with some sociocultural issues when it expanded into the Indian market, particularly relating to its menu and meals. The restaurant had to be well-positioned to profitability from the increasing demand for affordable, clean, and convenient food in India. The Western-style fast-food market is still quite small in India, although it is expanding rapidly as young people are increasingly grabbing meals on the go or celebrating special events by eating out (Financial Times, 2015) . McDonald's, an early Western entrance in competitive food industry of India tried for decades to deal with a significant issue. The restaurant's primary products – beef burgers – is forbidden for the majority of Hindus in India. However, the restaurant has overcome this challenge by creating a recipe for appealing to Indian palates. Further, in Saudi Arabia, McDonald's also adjusted to the local traditions, whereby it closes five times every day for Islamic devotions. Besides, its menu has no pork products with respect to Islamic traditions.

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Political Issues

Another issue which McDonald's had to overcome in the Indian fast food market was a political risk. Political risk is the political conditions, events, or decisions that could influence the business environment of a country in ways which could adversely affect investments or have to accept reduced returns. The political risk element for McDonald's was relatively significant in its expansion to the international scene as there were various countries which could not all Foreign Direct Investments in the fast-food sector or prohibit the franchise model of business which the restaurants mainly uses as its strategy for global expansion (Financial Times, 2015) . For example, in the case of India in which 80% of the people does not consume beef and certain religions have prohibited the consumption of port, the restaurant customized its products to the indigenous needs, in a manner which evaded possible political conflict in India. 

Legal Issues

In the UK, a few years back, McLibel tarnished McDonald's. McLibel was the lengthiest trial in Britain’s history. Activists took a legal action against the business for the exploitation of teenagers in adverts, production of deceptive adverts, and brutality to animals as well as opposed to unionization. The restaurant lastly settled the lawsuit for ten million pounds (Nicholson, 2000) . The company, later created a plan for addressing its UK situation. These measures taken by the company included tacking effect of recession through providing good value products, attracting new and varied clients, and improving its tarnished image. Eventually, the restaurant was able to restore its image, and it is among the leading restaurants in the UK market today. 

Ethical Issues

Environmental Issues

When any multinational enter an overseas market, it has to follow the local environmental acts. One of the considerable environmental challenges which McDonald's has faced in the past and has been able to overcome is the problem of waste packaging. To address the issue of packaging waste, the restaurant remodeled its packing with sustainable resources, which are also biodegradable. The restaurant in 2011 stated that 82 percent of its packing was created from renewable resources (CSRwire.com, 2002) . On top of redesigning packaging, McDonald's introduced recycling programs. For instance, most of its restaurant in Britain started reusing waste to convert them into energy rather than depositing them in landfills.

Besides, to overcome various environmental issues, the restaurant has strived to be environmentally friendly. In the UK, the restaurant has enacted specific environmental regulations for making firms conform to them. For example, there are certain forms of laws for the wastage disposal which business operations generate. Consequently, environmental friendliness creates willingness to the business and offers a chance for building a brand name. Also, the restaurant also engages itself in Corporate Social Responsibility activities such as healthy and nutritious food items and supply chain management (Financial Times, 2015) . In the UK, recently, the restaurant has introduced a menu that has low-calorie content, nutritive to the customers' health.

Safety Standards 

Recently, food safety concerns have undermined McDonald's in China. The restaurant was recently adversely affected after an undercover television exploration blamed the restaurant last year for using mainland supplier which relabeled meat which was expired (Financial Times, 2015) . Ultimately, this affected the company's sales in China, because its reputation was tainted. However, McDonald's is now working with independent experts to aid in improving safety standards. The restaurant works with suppliers for auditing their processing facilities for ensuring that their animal products are processed healthily and safely.

Workplace Conditions and Policies 

Over the years, employees of McDonald's have been filling a series of complaints against the restaurant claiming that the working conditions at the fast food multinational are hazardous. This particularly happened in McDonald's Ajax in the Netherlands, among other branches worldwide. Consequently, McDonald's Ajax resolved to address the issue of safety standards by establishing a health and safety policy. The branch is committed to offering all workers a healthy and safe working environment. All the employees, irrespective of their post, are obligated to take a proactive tactic to the maintenance of a healthy and safe workstation (McDonald's Ajax, 2017) . Similarly, the restaurant is devoted to offering the necessary training and information to attain this objective. The restaurant is also dedicated to appraising its health and safety policies yearly.


CSRwire.com. (2002, April 4). McDonald's Issues First Worldwide Social Responsibility Report: Press Releases on CSRwire.com. Retrieved from https://www.csrwire.com/press_releases/25172-McDonald-s-Issues-First-Worldwide- Social-Responsibility-Report-

Financial Times. (2015, January 29). McDonald's and its challenges worldwide: a market-by-market look. Retrieved from https://www.ft.com/content/f8ac22fc-a7c1-11e4-8e78-00144feab7de

McDonald's Ajax. (2017). health & safety – McDonald's Ajax. Retrieved from http://www.mcdonaldsajax.com/about-2/health-safety/

Nicholson, M. A. (2000). McLibel: a case study in English defamation law.  Wis. Int'l LJ 18 , 1.

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