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Nine Key Trends in the Economy Professor Choi, Kiwhan ECON-510: Economic Analysis for Managers Nine Key Trends in the Economy

McDonald's Corporation is an American fast food business with a global reach. The business was founded in 1940 and was operated by Richard and Maurice McDonald, in San Bernardino, California (McDonald's, 2023). Ray Kroc took over the company in 1954 and created the fast food giant that we know today. The company has a global foot print and mass appeal across many cultures. The business provides a cheap food option for all families and provides their service in a fast manner that has appeal for busy individuals and on the go families. Everyone has eaten at a McDonald’s at one time or another. It has a mass appeal and does not appeal to one financial class over another. While many lower income families eat at McDonald’s due to its affordability, the convenience of drive through options as well as the speedy service makes it the choice of many busy people of all financial classes. This is not the only way McDonald’s brings people together. The corporation is known for its diverse hiring strategy and the business giant employs entry level employees to elite businessmen with years of experience. McDonald’s also provides learning opportunities for their employees and tries to promote from within (Lowe, 2018). This practice provides employees with financial class movement. The entry level employee can use the benefits offered to them to earn a better wage. McDonald’s is a technology driven business. They use the latest technology to provide the best consumer experience. The business is also known for its efficient way of producing its product and this done through the latest technology. Self-serving kiosks is one of the newest forms of technology that McDonald’s has implemented (Marr, 2022). This allows consumers to customize their own orders and pay for their items with no interaction with an employee and makes the ordering process more efficient. The business also uses smartphone technology for mobile ordering, social media outreach, and advertising. The data collected from the mobile

ordering and ad interaction allows McDonald’s to tailor their offerings to the individual customer. The internet has certainly changed the way McDonald’s approaches its business practices and consumer outreach. Robotics development has played a major role in how McDonald’s serves its customer base. The cooking technology has a robotic element and provides an efficient way of cooking multiple menu items to ensure a fast delivery and uniform product to the consumer. Drink conveyers are another aspect of robotics that has changed the way servers interact with the beverages that they prepare. Employees no longer have to manually fill the cups with ice and liquid. The drink conveyer system allows employees to fill the cups with precision and uniform consistency. McDonald’s belongs to a monopolistically competitive market structure. A monopolistically competitive market structure has a low barriers to entry so there is many competitors in the industry and the product offerings are differentiated from one another. A business must have something unique to offer the consumer in order to remain competitive against the many opponents within the industry. McDonald’s differentiates their product by providing a superior customer service experience and a fast serving time than its closest competitors. They also have a great advertising campaign that targets children. McDonald’s has a brand loyal customer base and some of the best slogans ever produced by an advertising team. They also use celebrities to build loyalty from their customers. If a person is a fan of a sports figure, actor, or cartoon character that McDonald’s advertises with they will have a link to the business. Price elasticity of demand is a measurement of the change in sales of a product or service in direct correlation to a change in a product or services price. McDonald’s suffers from an

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elastic demand. This is due to the relationship their products have with the price they are being sold for. There are too many options within the fast food service industry for McDonald’s to not be effected by the price it chargers for its products and services. The way McDonald’s is so successful in this highly competitive market is to differentiate its products. The way the business does this is through advertising, cost, quality, and branding. Macroeconomic factors include unemployment rate, inflation, and foreign exchange rates. McDonald’s pricing is based on the competitions pricing. They must remain competitive since the market is highly saturated. Price changes can affect the business’s financial outlook a great deal. An ageing population has forced McDonald’s to change some of the practices that they have used in the past. Entry level positions were typically filled by students and young workers looking for their first job opportunities but this is no longer the case. McDonald’s has made an effort to provide job opportunities to older Americans and retirees due to the aging population and lack of employment options available to some of that demographic (Jones, 2019). An older population which usually lives on a fixed income has also provided McDonald’s with another target market. Since McDonald’s tends to draw in the budget minded consumer because of their lower cost food options, American’s living on a fixed income can find McDonald’s a good option for quick meal. McDonald’s has been a global leader in the fast food industry for many years. McDonald's has locations in 118 countries and territories throughout the world. McDonald's grossed $23.18 billion in global income in 2022. This global position has forced its competitors to expand into these markets to remain competitive. McDonald’s is always looking for the next frontier to erect their golden arches. The corporation is expanding its presents in India, China,

and Russia (Trefis, 2011). Deglobalization is not effecting McDonald’s in any significant way. They have a secure supply chain and are not disconnected from their other global locations. Climate change is inevitable and we as humans are going to have an effect on the environment that we are living in. However, we should try our very best to prevent the destruction of the world in which we live and leave as little of an impact as possible. McDonald’s makes a global impact on climate change. The business has a large climate foot print due to the sheer number of locations and products consumed by their customers. McDonald’s is very much aware of this impact and is trying to combat the influence they have on the world’s climate. The business is implementing solar panels at some locations, committing to climate friendly suppliers, monitoring energy consumption, and investing in renewable energy projects (McDonald's, 2023). Another way McDonald’s is reducing their impact on climate change is reducing the number of brick and mortar offices they have. When employees can do their tasks from home, the business allows the employees to stay home and work reducing the climate impact by cutting out the commute and energy consumption of an office building. Sacristy is when the consumer demand for a good or service is greater than the availability of that good or service. McDonald’s is not immune to the economic concept of scarcity. In many of the overseas locations, McDonald’s is suffering from a shortage of its flagship menu item. The famous golden arches are based on the french fries that McDonald’s serves. There is currently a potato shortage that is effecting many countries around the globe. McDonald’s has found a clever way of combating this shortage. Veggie fries are found on the menu in many European countries as well as Japan (Kline, 2023). This shortage of potatoes shows how McDonald’s can adapt their menu to a shortage of a raw material including the one menu item it is most famous for. Despite the pandemic, employment shortages, and inflation

McDonald’s has weathered the economic storm. The business is solid and has many good attributes. Management is attentive to the needs of the market and make the necessary changes to make the business succeed. References

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Jones, C. (2019, April 24). Your browser is not supported . McDonald's commits to hiring older Americans to fill jobs. https://www.usatoday.com/story/money/2019/04/24/mcdonalds- wants-hire-older-americans-new-partnership-aarp/3543170002/ Kline, D. (2023, March 10). Thestreet.com . thestreet.com. https://www.thestreet.com/restaurants/mcdonalds-menu-has-new-answer- for-french-fry-shortage Lowe, R. (2018, March 21). Why McDonald's employees are Lovin' it . Undercover Recruiter. https://theundercoverrecruiter.com/mcdonalds-company-culture/ Marr, B. (2022, June 22). The Metaverse And Digital Transformation At McDonald’s . Forbes. https://www.forbes.com/sites/bernardmarr/2022/06/22/the-metaverse-and- digital-transformation-at-mcdonalds/?sh=30f76dbf3967 McDonald's. (2023, October 5). About us . McDonald's: Burgers, Fries & More. Quality Ingredients. https://www.mcdonalds.com/us/en-us/about-us.html McDonald's. (2023, October 7). Climate action . McDonald’s Corporation. https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/our- planet/climate-action.html Trefis. (2011, April 15). McDonald's competitors pushing into emerging markets . https://www.nasdaq.com/articles/mcdonalds-competitors-pushing-emerging- markets-2011-04-15

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