Question

McDonald’s is a well-known fast food chain throughout the world. In recent years, it has worked hard to broaden its menu offering and try to broaden its food appeal. It has introduced some healthier options and has also added higher quality food and coffee as well.

In addition to having thousands of locations throughout the world, McDonald’s also has very strong brand equity and is generally considered one of the top 10 most valuable brands in the world. This has been achieved over many years through a combination of store locations, media attention, advertising and other forms of promotion, including sponsorships.

McDonald’s is a significant user of sponsorship as a key form of promotion. Because of McDonald’s long history in fast food offerings, there is a proportion of consumers that have a strong negative attitude towards McDonald’s – because they perceive McDonald’s as primarily selling “junk” food. And McDonald’s uses sponsorships in order to counteract this and create positive view of the company by doing good things in the community and for local groups.

For example, for many years, McDonald’s have been involved in Ronald McDonald house and various other related health sponsorships. In many countries, they also are sponsors of sport and children’s activities. However, critics argue that McDonald’s should not be associated with anything regarding health or sport.

1. What is your current perception of McDonald’s in terms of their food offerings? Do you think that they have worked hard enough to broaden and diversified their product offering or are they still primarily a fast food chain?
2. Do you think that McDonald’s is acting as a “good corporate citizen” in their sponsorship activities, or do you think that they are primarily interested in associating their brand with food and health?
3. Referring to the question above, provided that McDonald’s is supporting worthwhile causes, does it really matter what McDonald’s intentions and goals are?

Answer 1

McDonald's started out in 1940 as a fast food restaurant in San Bernardino, California, USA. It gradually expanded operations and turned into a franchise. Today, it earns maximum revenue from the royalties, fees paid by various franchisees spread across the globe.

McDonald's is known for offering region specific menus in its franchisees across the globe. It has followed the Think Global Act Local strategy. It offers customised product offerings, selling different product versions in different countries. McDonald's is best known for its burgers and French fries but due to increasing consumer preference for healthy food, it has added many salads, smoothies and fruit dishes to its menu.

Despite the fact that burgers and French fries are often regarded as 'junk food' by most food critics, McDonald's global success won't have been possible without the inclusion of these two staple food items on its menu. The taste McDonald's has created for burgers and French fries across the globe can't be denied and is a major reason for its success. Further, McDonald's has always taken into consideration the local tastes and preferences of its franchisee's country of origin and created newer dishes with changing needs. In India, McAloo, Maharaja Mac, McSpicy Paneer are some of the offerings with exquisite Indian taste. Similarly, McArabia and McCrispy are two offerings with Bahrain (Middle-East) specific taste. Further, McDonald's has been offering halal certified meals in Indonesia and added local items like McRice, McSoup to its menu there. In Germany, McRib, which is otherwise a seasonal dish on the menu at other outlets, is offered throughout the year. The Greece branch has the Greek Mac- a Big Mac variant on pita bread with tzatziki sauce, catering to the local taste. Thus, it can be said that by diversifying the menu to suit country specific tastes, McDonald's has managed to retain its customer base by taking into account the local sentiments and preferences.

McDonald's been known to sponsor high-profile sports events since a long time. Since sports is one such area that is known to unite the world together, McDonald's believes it's sponsorships are meant to celebrate the very spirit of sportsmanship itself. McDonald's also has many football coaching programmes that often see McDonald's own young staff members as participants. Hence, McDonald's sponsorship strategy can be seen as a community building exercise.

On the other hand, many have blamed McDonald's sponsorship strategy for increasing obesity among the younger generation. Since sporting events are watched by people of all ages, the younger ones might develop the bad habit of consuming excessive junk food.

Given McDonald's growth strategy, newer outlets can be expected to come up in different locations across the globe. Though McDonald's has endeavoured to diversify its menu by adding healthier options to it, it must monitor its operations by segmenting each global market in order to better understand region specific goals. Some countries have stricter health laws and McDonald's must see that it's goals aren't conflicting with the local laws and regulations.

As McDonald's is a global firm, it's take on healthier food options will have a spillover effect on all its branches. Hence, it's goals must be formulated keeping in mind country-specific rules relating to health laws for avoiding any discrepancies in its global operations.