The Impact of Globalization on Economic Decision

THE IMPACT OF GLOBALIZATION ON ECONOMIC DECISION
The Impact of Globalization on Economic Decision
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THE IMPACT OF GLOBALIZATION ON ECONOMIC DECISION1
Table of Contents
Macroeconomic factors causing strong headwinds for McDonald’s..............................................2
Oligopolistic behavior of rivals in the fast-food industry................................................................2
Dollar Menu strategy of McDonald.................................................................................................3
Implication of development of mini-restaurant...............................................................................3
Effect of various policies of government on international expansion of McDonald.......................3
References........................................................................................................................................5

THE IMPACT OF GLOBALIZATION ON ECONOMIC DECISION2
Macroeconomic factors causing strong headwinds for McDonald’s
McDonald reported significant decline in the reported sale in November 2012. This is
considered as the first decline in monthly sales in the last nine year. The Chief Executive of
McDonald, Don Thompson suggested that both microeconomic and macroeconomic factors are
responsible for decline in McDonald’s sale. The most important macroeconomic factor causing a
contraction in store-sales is decline in the sentiments of customers. Slow recovery of the global
economy and uncertain global economic condition limited ability of consumers to dine out at
restaurant. This tendency was particularly prevalent among the young consumers who has a
higher tendency to consume fast food (Gasparro, 2019). One possible strategy to attract
consumer is to lower price of the fast food. Global economic condition and increase in global
commodity prices restricted ability of the McDonald to decrease price.
Oligopolistic behavior of rivals in the fast-food industry
During the time of continuous decline in sales McDonald faced an increased competition
from its rival. The rival were found to revise their own strategies. Burger King, one rival of
McDonald worldwide began to offer new promoting discounts and sandwiches. Another
competitor Wendy’s Co. offered different coupons, added different fresh items to the menu and
upgraded restaurant. Additionally, Burger King introduced new items called “King of the
Month” to give a tough competition to McDonald. The non-price competing strategies of rivals
include keeping the restaurant open even in holidays, promotion of new kind of sandwiches,
coffee drinks and others.