The Impact Of Globalization On Economic Decisions

542 words - 3 pages

In 2012, McDonald’s Corp had a 4.5% decrease as economic troubles pressured margins and consumer confidence. Due to higher food, labor, occupancy and business investment costs, McDonald’s had negative profitability. In addition to the already difficult situation, consumer confidence was at an all time low, with consumers pressuring them to increase its marketing and promote value. “McDonald’s are experiencing headwinds on both the top and bottom lines. Some of the headwinds are macroeconomic, such as declining consumer sentiment. Other pressures are the result of planned strategic decisions that were made to grow the business, such as enhancing its value menu and implementing new technology” (Gasparro, 2012).
An oligopoly is a “market structure characterized by competition among a small number of large firms that have market power, but that must take their rivals’ ...view middle of the document...

The company has started considering consumer interest, best practices and price differences, when determining the growth of drivers at work. McDonald’s updated its restaurants, modernized and took advantage of consumer proclivity by offering smaller items throughout the day. In addition to the dollar menu, McDonald’s also added items that range in price to appeal to all consumers. “In doing this, McDonald’s have protected profits by offsetting cheaper items” (Jargon, 2011).
The development of McDonald’s mini-restaurants has improved overall profitability by improving their bottom line. In 1991, it cost less to build a mini-restaurant than it does today; however, the mini-restaurant could still handle the amount of volume that a person would see at a regular sized location (Farnham, 2014). In building mini-restaurants, the consumer market could expand in areas that were not able to support the traditional restaurants.
The need for healthier menu items has been the major factor in influencing McDonald’s expansion strategies. Another factor would be increasing the amount of drive-throughs and delivery services. Although the United States is not a place where delivery is an option, in larger countries it is. Competitive pressures push McDonald’s to realize that innovation in the global market could increase their profits (Jargon, 2012).

References

Farnham, P. (2014). Economics for managers (3rd ed). Upper Saddle River, NJ: Pearson Education, Inc.

Gasparro, A. (2012). McDonald’s loses some momentum. Retrieved November 2, 2014, from http://online.wsj.com/articles/SB10000872396390443437504577544650620997144

Jargon, J. (2011). How McDonald’s hit the spot. Retrieved November 2, 2014, from http://online.wsj.com/articles/SB10001424052970203430404577093051519700964

Jargon, J. (2012). McDonald’s is feeling fried. Retrieved November 2, 2014, from m http://online.wsj.com/articles/SB10001424127887323894704578106650828393198

Other Essays Like The Impact of Globalization on Economic Decisions

Overall Monetary Policy of the Government and Its Impact on the Macro Economic Objectives

1202 words - 5 pages Overall Monetary Policy of the Government and its Impact on the Macro Economic Objectives 1. Introduction to the Monetary Policy The Monetary Policy of any country is an important one, as it defines the role and establishment of a central bank within a country and through it attempts to regulate and manage the money supply within an economy in order to achieve specific goals such as Constraining Inflation or Deflation

The Effect of Religion on Hamlet's Decisions

1310 words - 6 pages The Effect of Religion on Hamlet’s Decisions For as long as history has been recorded, most humans have turned toward religion to guide them through everyday life. Religion often contains a moral code governing the conduct of human affairs. Most religious people also believe in a life after death in which one’s actions during their time on earth determine whether they are privileged in their afterlife and go to Heaven or punished and go to

The Economic Crisis and Its Impact on Defense

890 words - 4 pages THE ECONOMIC CRISIS AND ITS IMPACT ON EUROPEAN AND CYPRUS DEFENSE By Dr Aristos Aristotelous The relentless question of prioritizing and allocating scarce national resources to unlimited uses and requirements becomes even harder in times of economic crisis. In Cyprus - as in other EU countries - the tragic state of the economy and the need to exit from the crisis, brings unbearable pressure on military spending and is impacting on priorities

Impact of Globalization in Malaysia

5854 words - 24 pages implemented as to face its challenges and try to benefit it for the future. So, this assignment will discuss more on globalization and its impact. 2. FACTORS CONTRIBUTE TOWARDS GLOBALIZATION IN MALAYSIAN CONTEXT Briefly explain that, in order to open the international capital, the Malaysian government enlarged its integration into the global economy firstly through an embrace of export led growth

Globalization and Its Impact on Humanity

2194 words - 9 pages Qadry: ID# 11499 Date: 12/3/2012 Zahra Aziz: ID# Course: English 115 Globalization and Its Impact on Culture, Economy, and Information Technology Introduction: The world is not constant forever. People reside in different parts of the world; adopt many changes into their life styles and social structure over time that causes the world to change. Almost all the people in this world are somehow engaged in a huge network invented by

The Economic Impact of the New Telecommunications Legislation

1555 words - 7 pages will have access to relatively high-quality services, regardless of where they live. Advances in telecommunications technology enable companies to offer a wide variety of new services to satisfy the needs and interests of consumers. One of the goals on the legislation is to ensure that all Canadians benefit from innovations in communications. In addition to promoting the economic benefits of telecommunications technology, the legislation also

The Social, Environmental and Economic Impact of Tourism

2452 words - 10 pages in the long run. The Travel and Tourism industry is a highly sensitive industry. So, if the economy of that area is totally depends on tourism it will be very harmful not only for that area but country also. The Economic impact of Tourism Some positive impacts are: • Tourists contribute to sales, profits, tax revenues, and income in an area. • Creates more jobs • More locals will be employed = more money • Contributes to income and

Environmental Economic Impact Of Pollution In The Chesapeake Bay

2859 words - 12 pages The Chesapeake Bay is the nation’s largest estuary with six major tributaries, the James, the Potomac, the Susquehanna, the Patuxent, the York, and the Rappahannock Rivers, feeding into the bay from various locations in Maryland, Virginia, Pennsylvania, and the District of Columbia (Chemical Contaminants in the Chesapeake Bay – Workshop Discussion 1). These areas depend on the Bay as both an environmental and an economic resource

Economic Impact of File Sharing

4281 words - 18 pages , throttling (the limiting of bandwidth to heavy downloaders), or blocking content and websites are also rejected because they would hurt freedom of speech and privacy protection laws. Ultimately, the suggestion that the Swiss government communicates to the music industry is that they should adapt to the change in consumer behavior, or die. They see no reason to change the law because downloading has no proven negative impact on the production of

Economic and Social Challenges in the United Kingdom and Their Impact on Business

3729 words - 15 pages Recession. “The globalization of business and finance caused huge inter-dependencies between economies. This inter-dependence caused the recession in the United States to have a large-scaled impact on the economy of the United Kingdom.” Most large businesses are growing their business markets by expanding globally. These businesses are attempting to expand in emerging markets such as India, China, Africa, and Brazil. There has been an increase

Did the Post War Economic Boom Have a Positive or Negative Impact on America?

859 words - 4 pages . The invention of televisions promotes the industry of televisions show, channel or program and stimulate economic grew. The growth in suburb provides privacy and space for consumer growth and lead to new building built in city. The growth in housing, automobiles and roads was resulted from the suburb growing because a division between work place and home was formed for men. Other negative impact on the American society include women were

Related Papers

Assessing The Impact Of Globalization On The Caribbean Business Environment

3225 words - 13 pages The purpose of this paper is to assess the impact of globalization on the Caribbean business environment. Much has been written about globalization which is more accurately viewed as a process of change rather that an event which has already occurred. The impact of globalization on any environment can be both positive and negative and can be described as the enablers or the constraints which affect the decisions made by leaders, both government

The Impact Of The Global Financial Crisis On Economic Growth

3967 words - 16 pages Economic growth The impact of the Global Financial Crisis on economic growth As a result of the global recession, Australia’s GDP was forecasted to contract by 0.5% in 2009-10 in comparison to other advanced economies which were expected to contract by 3.75% in the same year. However minor the reductions in GDP, it was evident that Australia was not exempt from the global recession although is better placed and is expected to perform better

The Impact Of The Global Economic Crisis On The World Economic Order

772 words - 4 pages The Impact of the Global Economic Crisis on the Arab World The Arab countries had experienced rapid changes in their economic fortunes in the year 2008. During the first half of 2008, oil, natural gas, and other commodity prices continued to rise rapidly, leading to huge gains. At the same time, they had to cope with rapidly rising food and raw material prices that threatened their economies and social stability. By July, the effects of the

Describe The Impact Of World Trade Organization's Globalization Strategy On Taiwanese Agriculture

1261 words - 6 pages , the market gradually became stable again and some farmers also found new ways to make a living on their own. The impact on agriculture after WTO entry was enormous and farmers still needed time and government's assistance to go through the transition duration. I will explain those in the following paragraph. The government also needed to strategically manage updated and adjusted policy for the substantial development of agriculture. Since Taiwan