McDonald's Company: Business Model and Ethical Challenges

This presentation discusses the use of Porter's generic strategies to resolve business problems faced by McDonald's Company, including limited target market and rise in competition. It also highlights the ethical challenges faced by the company, such as environment issues and child exploitation. The presentation suggests the implementation of cost leadership, differentiation, cost focus, and differentiation focus strategies to eliminate the issues. Additionally, it recommends the use of the ICAEW framework to resolve ethical problems.

Introduction to
Business
McDonald’s Company

Introduction
• This presentation is the group presentation which includes 3-4
members. The presentation will demonstrate the use of the
business model that helps the company to resolve the
business issues.
• Along with this, there are numerous ethical challenges which
are faced by McDonald’s company.

Management Model
• Porter’s generic strategies are
introduced by the Michael Porter
in the year 1996 in Harvard
Business Review article 5.
• Porter’s generic strategies
describe the ways through which
the company pursues the
competitive advantage across its
chosen market scope.
• It includes 4 strategies that are
Cost leadership, differentiation,
cost focus and differentiation
focus.

Business problems faced by
McDonald’s
McDonald’s company faces numerous challenges which impact
the working of the company within the market.
• The similar menu of McDonald's
• Limited target market
• Price sensitive
• Rise in competition

Ethical issues faced by the
company
• The environment issues are faced by the company because
they are continued to use paper and plastic.
• The company faced the issues related to wage theft, poverty-
level pat and mistreatment of pregnant workers.
• The charity done by the company lost their reputation in the
market because of child exploitation issues.

Application of model
The company should apply these strategies so that the issues can
be eliminated.
Cost leadership
• The strategy will help the company to become the lower
producer in the market. If the company brings the changes in
price then it will not make the customer price sensitive or they
are affected due to price.

Continue…
Differentiation
• The company should apply this differentiation strategy with
the help of which they can understand the needs of
customers.
• This strategy can bring the changes in the menu which will
resolve the issues of the similar menu.

Continue…
Cost focus
• The implementation of this strategy will help the company in
offering the cost advantage in its target segment.
• The products of the company at the affordable price provide
the advantage to the target segment.
• McDonald's will be able to resolve the issues related to the
price and customer satisfaction.

Continue…
Differentiation focus
• McDonald’s company will be able to target the wide range of
customer by offering attractive and differentiate products.
• This will be possible with the implementation of the strategy.
Thus, this resolves the issues of the limited target market.

The solution for ethical issues
The company should make use of the ICAEW framework that
helps the company to resolve the ethical problems.
• Gather the facts and information for identifying the problems
• Determining the affected parties
• Considering the involvement of ethical issues
• Determining which fundamental principles are affected
• Refer to employing organisation’s internal procedures
• Evaluating the alternative course of actions
• Implementing and monitoring the actions

Conclusion
• In the end, it can be concluded that McDonald’s company
face numerous issues while operating the business in the
dynamic environment. The model that has been
implemented to resolve the issues is Porter's generic
strategies.

References
• Flouris, T.G. and Oswald, S.L., 2016. Designing and executing
strategy in aviation management. New York: Routledge.
• ICAEW (2018) Framework for resolving ethical problems
[Online]. Available from:
https://www.icaew.com/en/technical/ethics/framework-for-re
solving-ethical-problems
[Accessed on 10th July 2018]
• McDonald’s (2018) About Us [Online]. Available from:
https://www.mcdonalds.com/us/en-us/about-us.html
[Accessed on 10th July 2018]
• McDonald’s (2018) Ethics of McDonald's [Online]. Available
from:
https://mcdonaldsethics.weebly.com/mcdonalds-ethical-issue
s.html
[Accessed on 10th July 2018]

Continue…
• McDonald’s (2018) Our History [Online]. Available from:
https://www.mcdonalds.com/us/en-us/about-us/our-history.htm
l
[Accessed on 10th July 2018]
• Tanwar, R., 2013. Porter’s generic competitive strategies. Journal
of business and management, 15(1), pp.11-17.
• Teeratansirikool, L., Siengthai, S., Badir, Y. and Charoenngam, C.,
2013. Competitive strategies and firm performance: the
mediating role of performance measurement. International
Journal of Productivity and Performance Management, 62(2),
pp.168-184.
• The Star (2014) 5 problems facing McDonald’s [Online]. Available
from:
https://www.thestar.com/business/2014/10/22/5_problems_faci
ng_mcdonalds.html
[Accessed on 10th July 2018]