McDonald’s is the largest fast food retailer in the world. With operations in over 115 countries, there are numerous challenges they are faced with as they grow into new cultures and demographics. Key issues this analysis focuses on are: culture and ethics, politics and legal issues, and resource management.
In any country McDonald’s enters, they tweak their menu to provide a stronger link with the local consumer. This can range from gourmet desserts in Italy or vegemite in Australia. By modifying their menu, they are able to better reach their consumer and continue to grow their market share.
Any large company will have to deal with lawsuit and government policies. As the country changes, so do the policies. Whether it is labor relations or health concerns, by staying ahead of any major issues, larger mishaps are avoided. This isn’t always the case, as in the
“Million Dollar Coffee Cup” lawsuit, where McDonald’s was sued for millions because a customer was burned by spilt coffee.
Few companies can match McDonald’s cash flow. With enormous yearly revenues, the company has the resources to not only continue to improve their existing system of restaurants but also expand into blossoming new markets. Realizing the best way to use their resources has always been one of McDonald’s managements’ strengths.

McDonald’s is one of the world’s most established and well-recognized global brands.
Operating in over 115 countries, McDonald’s is the poster child of a multinational enterprise
(McDonald’s, 2013). By managing issues from cultural and ethical differences, dealing with political and legal pressures, and an effective use of its resources and capabilities, McDonald’s continues to dominate the fast food industry and will only continue to become a stronger company.
McDonald’s began as a small barbecue joint in California run by Richard and
Maurice McDonald in 1940. By the late 1940’s, they had repurposed themselves into a hamburger stand. Once businessman Ray Kroc became a franchisee and a prominent member of the organization in 1954, eventually buying out the brothers, McDonald’s began to grow rapidly.
McDonald's is now the world’s leading food service retailer. It services more than 64 million people and in 2009 they had over 33,000 local restaurants serving over 64 million people in 118 countries. Over 75% of McDonald's restaurants worldwide are owned and operated by independent local entrepreneurs (McDonald’s, 2013).
McDonald’s has operations in three distinct geographical regions: the United States,
Europe/Asia-Pacific and the Middle East/Africa. These divisions are based primarily on similar tastes and styles of food, though at some point they expect the Asia-Pacific area will require its own operational organization. McDonald’s identifies the United States, Canada, France,
Germany, the United Kingdom, Australia, China and Japan as its major markets (McDonald’s,
2012).

Its success has not come without challenges. Adjusting menus, facing heavy lawsuits, dealing with an increase in obesity awareness, and constantly having to manage resources are all parts of McDonald’s and will be analyzed more closely in the following paragraphs.
Culture and Ethics
According to McDonald’s website, “Sound ethics is good business. And they conduct themselves with high standards of fairness, honesty and integrity. We are individually accountable and collectively responsible.”
The company provides its employees with excellent coaching, leadership, mentoring and educational workshops for them to succeed at their jobs as well as in life. They also focus on intercultural learning practices, also known as diversity education so that they can better service their customers. Employee Business Networks and online mentoring programs are also key ways
McDonald’s goes above and beyond so their employees can succeed. McDonald’s has various commitments to help improve communities around the globe. One of their best known charities is the Ronald McDonald House. The charity was started over 38 years ago and focuses on children’s needs and celebrates diversity programs (McDonald’s, 2013)
McDonald’s also partners with many organizations including: the NAACP, American
Indian scholarship fund, Catalyst, Hispanic Association for Corporate Responsibility, the Asian
Pacific Islander American Scholarship Fund and The Global Inclusion and Intercultural
Management to name a few. These partnerships, as well as many others have allowed
McDonald’s to flourish in countries around the world.
McDonald’s has made numerous additions to its menu depending on where in the world you are dining. Basing its choices on local culture and preferences, McDonald’s launches new

items in hope of stimulating consumer purchases. This makes people in all countries feel less like they are aiding a giant American corporation but rather eating at a restaurant that caters to their fancies (Schnaubelt, na).
Political and Legal Issues
One of the major issues large companies face, such as McDonald’s, are frivolous lawsuits. The most noticeable lawsuit in the fast food industry was “the million dollar coffee cup”. In the case, an elderly lady sued McDonald’s for a cup of coffee that was spilled onto her through the drive-through window (Salisbury, 2013). A lawsuit such as this one damages the image of the company not only within the United States, but also internationally as well. For a brief period of time McDonald’s stopped selling coffee internationally until they could design a spill proof cup that could be delivered without incident (McDonalds, 2012). Instances such as this go to show that while a small cup of coffee can be a revenue generator for the company, it can also cause a company to shut down a portion of their global business to find a solution to ensure that the customer is safe at all times. Less frivolous lawsuits have also hurt McDonald’s.
In the United Kingdom, they dealt with litigation regarding product quality and labor conditions.
Both cases forced McDonald’s to change how they operated in the UK and also reevaluate how they enter new markets in the future (Salisbury, 2013).
Not only does McDonald’s have to ensure that they are providing a service that is above their competitors, they also have to ensure that they are following the political and legal issues within their respective environments.

One major concern for McDonald’s has to be the increase in obesity awareness. Having already taken a publicity blow with the movie Supersize Me, being more concerned about the nutritious value of their menu is a must. They began offering healthier options in for their combos, including apple slices and salads, though this is a small Band-Aid on an increasing problem. McDonald’s would be loath to lose a generation of customers because child obesity laws go into effect, and no profit gainer remains on the menu that meets the standards (Salisbury,
2013).
Resources and Capabilities
“McDonald’s success is built on quickly serving consumers with tasty, convenient meals they can enjoy in a comfortable environment. In order to do this, the business must run efficiently from suppliers...through to customer-facing staff” (McDonald’s, 2012). McDonald’s accomplishes this with great efficiency by utilizing its resources and capabilities. The productive utilization of its technological, physical, financial, human, innovation and reputational resources, have led to tremendous international success for McDonald’s.
“McDonald's Corp. has helped revolutionize the way restaurants use technology, dating back to founder Ray Kroc's fascination with serving burgers and fries in a matter of minutes”
(Nation’s Restaurant News, 2005). McDonald’s has long been at the forefront of technological innovation and advancement in the fast food industry. In the 1970’s, McDonald’s led the fast food industry’s transition from cash registers to point-of-sales systems. In the 1990’s,
McDonald’s was the first fast food chain to implement touch-screen at the front counters and in the drive-thru windows (Nation’s Restaurant News, 2005). In the past decade, McDonald’s has continuously introduced and tested new and innovative technology including: touch-screen self-

ordering kiosks, customer order centers, and mobile point-of-sales devices. In order to further execute the company’s business strategy, McDonald’s created the Store Technology Board
(Nation’s Restaurant News, 2005). The purpose of the board is to facilitate the development of technology in restaurants, deliver high-quality technology solutions, and provide effective communication by standardizing its technology and implementing a common point-of-sales system and platform the world over (Nation’s Restaurant News, 2005).
McDonald’s Plaza is the headquarters of McDonald’s located in Oak Brook, Illinois.
McDonald’s Plaza houses the company’s corporate offices and the all in important Culinary
Center, where potential products are tested in the kitchens (McDonald’s, 2013). Over 20,000 of
McDonald’s restaurants are franchised, with the rest being corporate owned. The company has restaurants strategically planted across the world in order to avoid being overexposed to the economic climate of any one market or having revenues highly concentrated in one geographical region (McDonald’s, 2012).
For the past six years, McDonald’s total revenues have increased year by year. In the financial year ended December 2012, total revenue recorded was $27,567 million. The operating income for FY2012 was $8.605 million. Income from continuing operations for FY2012 was
$5,465 million and the net income for FY2012 was $5,465 million. (Yahoo, 2013)
Considering McDonald’s success, it is hard to find room for major improvements.
However, there are some minor tweaks they could use to improve their overall success.

Given that a majority of their restaurants are owned and operated by locals, McDonald’s could continue to improve their menu based on suggestions from their team. Tapping into the valuable resource of such a diverse work force would only benefit the company. The franchisees are already invested in the company and want it to succeed. Allowing them to dictate some of the direction the company takes would eliminate the need for costly research. A local will know what other locals want, and what the best way to prepare it to continue with the fast and tasty company goal. Along these lines, McDonald’s has announced that it will be not only just modifying their menu, but offering a complete meatless-free restaurants in India, following the cultural bias against consuming the sacred cow. Many of their Indian managers informed them that while the beef burgers were indeed selling, it was not the locals, but tourists making those purchases (McDonald’s, 2013).
As concerns about obesity in not only children, but adults as well, grow throughout the world, McDonald’s can either continue to be a flagship for the “unhealthy” lifestyle as it was through the 90’s and early part of this millennium, or it can become a front runner in healthy options when dining on fast food. Before legal constraints are placed on restaurants regarding the nutrition of their food, McDonald’s should begin researching healthier alternatives that will be as popular as the hamburger joint classics. One idea is to integrate international offerings that are more nutritious here in America. Foreign food has shown to do well here in the states, with the emergence of pho, pad thai, and other international cuisines as common fast food options.
McDonald’s has said that it would like to focus on the current countries it does business in before expanding into any new markets (McDonald’s, 2013). While this is a good idea to ensure that it maintains a high level of satisfaction in a saturated market, the continuing growth of Latin and South America is a market that McDonald’s would do well to ensure their

dominance. Again, this part of the globe provides the company with new challenges regarding culture and politics, but there is no denying the fact McDonald’s has the resources to grow almost without stop. Continuing to use the method of numerous walk-through only locations in high pedestrian areas located throughout this area would be a good way to start slowly penetrating the market. Regardless of where they choose to do business, everyone knows about the Golden Arches.
There are few companies who have succeeded in globally integrating their business as well as McDonald’s. On a trip around the world, there would not be a day you wouldn’t be able to get a Big Mac. Due to its size, it has encountered many issues globally but has handled them all effectively. By adapting their business to the culture their doing business in, handling litigation and staying ahead of political concerns, and putting their resources to use effectively to sustain their growth, McDonald’s has a solid business plan that can used anywhere in the world.
As they continue to grow, they will continue to focus on offering a fast, high quality, low cost, tasty option to their consumers, whether it’s a hamburger in Omaha, a vegemite sandwich in
Sydney, or a meatless tandoori lettuce wrap in New Delhi. The sun never sets on the
McDonald’s empire and there is no reason to believe that it ever will.

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