Mcdonald's Corporation Case Analysis
McDonald’s Corporation Case Analysis
McDonald’s has made great strides in the sustainability of its supply chain over the past few decades. From a moratorium on soya coming from farms where Amazon rain forests have been destroyed, to developing sustainable fishery guidelines to manage fish quality and quantity, McDonald’s has taken great efforts to “do the right thing” [1]. This commitment to environmental sustainability has impacted how they source from suppliers and manage supply chain management initiatives.
With all that McDonald’s has done, there is still room for improvement. Engagement in sustainability efforts with suppliers has generally resulted from a call for change from activists who were negatively impacting brand trust. Acting in the best interest of society by providing healthy food alternatives to well-informed consumers also play a vital role in how the sustainable supply chain is managed. As such, the core problem facing McDonald’s green supply chain management infrastructure is that it is still reactive in nature and will always require a trade-off between societal benefit and cost minimization.
One alternative to consider is for McDonald’s to become more proactive at anticipating and managing emerging issues prior to a large-scale publicity and exposure. By doing so, McDonald’s can approach NGOs and interest groups with emergent problems, using the collaborative expertise to resolve potential hotspots before they erupt.
This approach simultaneously addresses many concerns. First, by identifying and addressing issues in an anticipatory manner, McDonald’s can be proactive, as opposed to reactive with interest groups. This will appease the groups, as it shows McDonald’s resolve to provide a sustainable supply chain, reducing the likelihood of open hostility and bad publicity. It also communicates that McDonald’s is committed to action on achieving its sustainability vision and not merely saying the right things to appease third parties. Furthermore, it leverages the resources of NGOs and interest groups, allowing them to conduct scientifically-based research and propose solutions, collaborating with McDonald’s as partners instead of launching damaging attacks.
By acting in an anticipatory manner, McDonald’s also has the best opportunity to save resources, costs, and reduce risk. Avoiding the public outcry and external calls for change allows McDonald’s to protect its brand image and mitigate risks to its revenue stream. Anticipatory action can also save costs, resolving problems prior to any major impact to the supply chain. Figure 1 illustrates how the benefits of being proactive and anticipatory in handling emerging issues.
Figure 1 [2]
The second alternative to consider is for McDonald’s to increase its campaigning efforts to raise public awareness of McDonald’s sustainable supply chain efforts. By doing so, McDonald’s can continue to be the front-runner in implementing its “three E’s” – Ethical, Environmental, and Economic – vision. As can be seen in Appendix 1, consumers expect companies to be socially responsible while also providing a quality product at the lowest price. From this campaign, McDonald’s can benefit from the first-order effects, expecting to see a better educated consumer base that has increased demand for the products McDonald’s offers.
There are beneficial second-order effects as well: consumer preference can lead to pressure being placed on other corporations to follow suit with McDonald’s efforts, providing greater leverage to implement change on a global scale. This can range from governmental legislation efforts being put in place to influence the sourcing of materials, to how farms and ranches impact the environment.
With these