McDonald’s Has Super Sized Itself
McDonald’s Corp is a long standing large firm that is based in the United States. In recent time it has run into some difficulty with growth. As the article stated, the corporation has possibly become to big for its own good. McDonald’s is now struggling with a changing customer base. The older, already established customers are now more excited about the “better burger” stores like in the example given, In and Out. The newer customers entering the market by in whole, have behind them a movement of healthier more simplistic menus. This leads into another problem faced by the firm which is the industrialization of the agricultural sector of its supply chain. The company needs a large amount of food to supply the large corporation. The growth of the working underclass has also been brought to the forefront for McDonald’s Corp by national media covering worker strikes all over the country.
McDonald’s not being able to adapt to the changing customer base is rooted in the very reason that they do have higher revenue than the “better burger” stores. McDonald’s has simply grown too large to implement fast change to its business model. As the author states, while it did try to compete with these smaller chains, in the long run it just left its menu bloated. The excitement of the “better burger” stores as interpreted from the article is that the food is more wholesome and the overall experience of dining in these types of restaurants is more simplistic. In and Out a store that is comparable to McDonald’s, was visited and the author found that he had only a few menu items to choose from. This keeps these types of restaurants from dealing with another problem McDonalds faces: the industrialization of the agricultural side of its supply chain. With thirty-six thousand stores McDonalds is forced to use large industrial farms for its supply of chicken. With that comes antibiotic fed animals that grow faster than natural so they can keep up with the demand of product from their stores. This practice of using “modified” food for human consumption has, as of late, become more scrutinized by the American consumer, and especially scrutinized by the newer customers entering the market. With a large corporation comes a large employee base. At this time in America there is a large and growing movement for a “living wage” to be paid to workers in what some would call lower skill jobs. McDonald’s is not immune from this and they face backlash of their employees and of opinion.
Solving the problems of McDonald’s Corp will be a daunting task for management because of the sheer size of the company. This is the first issue new CEO Steve Easterbrook is addressing. He will order the closure of hundreds of underperforming stores across the firm. This will help McDonald’s be able to adapt to a changing consumer market more quickly, still not as fast as some of the competitors, but much faster than if it kept these stores open purely for the size. McDonald’s is also addressing the issue of the antibiotic fed chickens that it sources for its supply chain. It was said in the article that they will push for the removal of the antibiotics from the chickens. This could impact the supplier’s bottom line as McDonald’s is (even with the store closures) most likely one of the, if not the biggest customer of the chicken supplier. The growth of the working underclass is another concern for McDonald’s. Mr. Easterbrook said that management will start to raise wages of these workers to help with this growing movement. The issues faced by McDonald’s will be helped by these moves by CEO Steve Easterbrook and his management team, while it may not solve them quickly, as the article says, bigger is not always better.