McDonald's Corporation and the Issue of Health and Nutrition

McDonald's Corporation and the Issue of Health and Nutrition free pdf ebook was written by Tabailey on July 16, 2007 consist of 68 page(s). The pdf file is provided by www.awpagesociety.com and available on pdfpedia since May 04, 2011.

mcdonald's employs more than 1.5 million people and serves more than mcdonald's nutrition and health impacts continued in 2002…...

x
send send what is readshare?


Thank you for helping us grow by simply clicking on facebook like and google +1 button below ^^

McDonald's Corporation and the Issue of Health and Nutrition pdf




Read
: 1800
Download
: 15
Uploaded
: May 04, 2011
Category
Author
: Tabailey
Total Page(s)
: 68
McDonald's Corporation and the Issue of Health and Nutrition - page 1
McDonald’s Corporation and the Issue of Health and Nutrition
You're reading the first 10 out of 68 pages of this docs, please download or login to readmore.
McDonald's Corporation and the Issue of Health and Nutrition - page 2
2 Table of Contents Introduction..........................................................................................4 1. History..............................................................................................6 1.1 The Early Years: 1950-1964................................................................6 1.2 Public Owned Company and Industry Leader: 1965-1970s.................6 1.3 Continued Expansion: 1980s................................................................7 1.4 Issue Brewing with the “McLibel” Suit: 1990s....................................8 1.5 The Health and Nutrition Movement Gains Momentum: Late 1990s -2003...........................................................................10 1.5a Repercussions....................................................................................11 1.6 2004 to Present...................................................................................12 1.7 Corporate Social Responsibility.........................................................14 2. The Issue of Fast Food, Nutrition, and Health...............................15 3. Opposition......................................................................................17 3.1 In General...........................................................................................17 3.2 McLibel..............................................................................................18 3.3 McLawsuit..........................................................................................19 3.4 Super Size Me.....................................................................................20 3.5 Fast Food Nation and Chew on This..................................................21 4. Responses by McDonald’s.............................................................23 4.1 Denial and Avoidance.........................................................................23
McDonald's Corporation and the Issue of Health and Nutrition - page 3
3 4.2 McDonald’s Blog...............................................................................25 4.3 Action Promised but Not Delivered...................................................26 4.4 Marketing Actions..............................................................................27 5. McDonald’s Challenge...................................................................29 Teaching Notes 1. Introduction....................................................................................30 2. Purpose of the Case Study..............................................................31 3. Overall Synopsis of the Case for Presentation...............................32 4. Teaching Components....................................................................33 4.1 Assignments and Activities.................................................................33 4.2 Explanation of Issues Management.....................................................34 4.3 Teaching Points in the McDonald’s Case...........................................35 5. Solutions through Application of the Page Principles....................40 6. Summarizing Key Recommendations.............................................45
McDonald's Corporation and the Issue of Health and Nutrition - page 4
4 Introduction From humble beginnings of only three restaurants in 1955, McDonald’s® has grown to be a powerful multinational corporation with more than 31,000 restaurants in 119 countries. 1 McDonald’s employs more than 1.5 million people and serves more than 46 million customers per day. 2 McDonald’s Corporation has long held the number one ranking in the fast food industry 3 (See Appendix 1). Across industries, McDonald’s restaurants rank in the top three American brands 4 (See Appendix 2). Being a major corporate force does not come without its drawbacks. By virtue of its leadership position, McDonald’s is also the global fast food industry’s biggest target. 5 One issue in particular—that of increasing obesity rates and health risks caused by diets high in fat and sugar—has been critical for McDonald’s. The corporation took its first major hit on this issue in the highly publicized “McLibel” suit in England in the mid 1990s. That court case came about as a result of protestors distributing pamphlets titled “What’s Wrong with McDonald’s: What They Don’t Want You to Know” that included numerous criticisms that McDonald’s charged were libelous. An unflattering documentary based on this case, entitled McLibel, was released in 2005 6 ) In 2001, Eric Schlosser published a scathing criticism of fast food in his New York Times bestseller book, Fast Food Nation: The Dark Side of the All-American Meal. A fictionalized account of this book was released as a motion picture of the same name in November, 2006 7 . Schlosser has also published a version of Fast Food Nation, designed specifically for 11- to 15-year-old children and entitled Chew on This,. Attacks on McDonald’s nutrition and health impacts continued in 2002 when two American teenagers filed a lawsuit against McDonald’s claming that the corporation was
McDonald's Corporation and the Issue of Health and Nutrition - page 5
5 responsible for their weight problems. But perhaps the most publicized and widely distributed charge of all came in 2004 when Morgan Spurlock released a motion picture directly aimed at McDonald’s, Super Size Me, a documentary presenting “one man’s journey into the world of weight gain, health problems, and fast food.” 8 Spurlock more recently released a modified version of the film geared specifically to children. In 2002, McDonald’s posted the first quarter loss ever in the company’s history. 9 Although the fast food giant has since managed to recoup system-wide revenue gains and incremental increases in per share stock prices from 2003 to 2005, these gains were modest. In 2005, while McDonald’s Corporation remained number one in the fast food market, it dropped to number 29 in growth. 10 PR Week reported that “the explosive growth of the golden arches was checked in this decade as fast food chains became identified as prime culprits in fuelling the obesity epidemic among children. Books such as Eric Schlosser’s Fast Food Nation and films such as Morgan Spurlock’s Super Size Me have served to popularise [sic] McDonald’s bashing.” 11 Public charges of knowingly providing fare that is potentially dangerous to the health and well-being of consumers has had a detrimental effect on McDonald’s corporate reputation and image as well as stunting its growth. This case study provides the opportunity to assess the critical corporate communications function of issue management for McDonald’s. More specifically, the case explores the company’s strategic communication responses to more than 15 years of criticism from mainstream and marginal advocacy and activist groups for promoting obesity and health problems among the populace at large.
McDonald's Corporation and the Issue of Health and Nutrition - page 6
6 1. 1.1 History The Early Years: 1950-1964 The first McDonald’s hamburger stand was owned and operated by two brothers, Dick and Mac McDonald, in California in the early 1950s. In 1954, Ray Kroc was an exclusive distributor for a milk shake mixer used by the McDonald brothers. Kroc visited the McDonald’s brothers’ establishment and observed first-hand how they used his milk shake mixers to serve a large number of customers quickly. Realizing that opening more McDonald’s hamburger stands would mean multiple sales of his milk shake mixer, Kroc suggested the brothers expand their business. When they agreed, Kroc volunteered to take charge of opening a chain of new McDonald’s hamburger stands. 12 One year after that visit to California, Kroc opened a Des Plaines, Illinois McDonald’s restaurant. 13 The explosive, rapid growth of McDonald’s is evidenced by the 100 th restaurant being opened only four years later in 1959. Success continued, and Ray Kroc purchased all rights to McDonald’s in 1961 for $2.7 million. By 1963, the fast food phenomenon had sold a billion hamburgers, producing a net income in excess of $1 million. 14 Also in 1963, McDonald’s introduced Ronald McDonald®, a clown character designed to engage and delight children. 15 1.2 Public Owned Company and Industry Leader: 1965-1970s McDonald’s went public in 1965, and the corporation’s tremendous success and exponential growth would continue over the next 3.5 decades. On the first day of trading McDonald’s stock, 100 shares cost a total of $2,250. By 2003, those same 100 shares had grown to 74,360 shares with a value of more than $1.8 million.
McDonald's Corporation and the Issue of Health and Nutrition - page 7
7 By 1972, McDonald’s assets exceeded $500 million and sales surpassed the $1 billion mark. A new McDonald’s restaurant was opening every day. 16 Recording the highest system-wide sales among the top 100 chains in 1972, McDonald’s commanded 16.7% of the total fast food market. 17 Part of the company’s exponential growth was attributed to going international. 18 In 1967, the first McDonald’s outside of the United States opened in Richmond, British Columbia; many more international restaurants followed. Clever marketing, tasty products, and super-fast service underpinned McDonald’s success. Now a household name, the Big Mac™ was introduced in 1968, followed by the Egg McMuffin™ in 1973, and the Happy Meal™ for children in 1979. In the 1970s McDonald’s continued innovations in convenience and speedy service, establishing the first drive-through. The company was even innovative in philanthropy, opening the first Ronald McDonald House™ in 1974 for the families of critically ill children needing a place to stay while young patients were undergoing medical treatment. Operationally, much of McDonald’s early growth was attributed to Kroc’s vision and leadership in establishing an efficient franchise operation. McDonald's was able to offer customers, employees, and managers a maximum degree of efficiency, calculability, predictability, and control through non-human technology. 19 Consumers were quick to accept McDonald’s as a branded product serving the same food, atmosphere, and value at each and every location. 20 1.3 Continued Expansion: 1980s McDonald’s entered the 1980s as the fast food industry leader with 18%—triple the share of its closest competitor, Burger King™. 21 Further attesting to its mega-
McDonald's Corporation and the Issue of Health and Nutrition - page 8
8 corporate stature, McDonald’s Corporation was added to the 30-company Dow Jones Industrial Average in 1985. 22 McDonald’s innovative advertising strategies further propelled its growth. In the 1970s, customers were told “You Deserve a Break Today™,” a message tied into a society with families looking for convenience as more women joined the work force. 23 During the 1980s, McDonald’s continued to tap into cultural change through public messages that reflected the values of mobility, economy, and convenience. While Wendy’s™ and Burger King provided intense competition in the early 1980s, McDonald’s emerged as the clear winner in system-wide sales due to “advertising messages that symbolically reconstituted the family and relocated it under the golden arches.” 24 McDonald’s became the place for being a family. 25 In the 1980s, as competitors adopted McDonald’s recipe for success, ever-more sophisticated differentiation strategies emerged. 26 While most menu options had been duplicated by other fast food companies, McDonald’s chose marketing communication strategies centered not on products, but on human needs and feeling. The theme “McDonald’s and You—We Grew Up Together™” evoked McDonald’s as part of the family experience. Advertisements featured vignettes and slice-of-life stories. 1.4 Issue Brewing with the “McLibel” Suit: 1990s By 1990, more than seven cents out of every dollar spent by Americans on food consumed outside the home was spent at McDonald’s. 27 McDonald’s per share stock price was $14.63 in 1994 and rose to its all-time high of $40.31 in 1999. 28 During that same time period, total revenues rose from $8,321 million (1994) to $13,259 million (1999).
McDonald's Corporation and the Issue of Health and Nutrition - page 9
9 McDonald’s had always been adept at attracting children using a formidable combination of child-friendly advertising showcasing the Ronald McDonald character as well as child-focused products like the Happy Meal, which came with child-sized portions and a free toy for the kids plus a lower price tag for parents. The ubiquitous Ronald McDonald is not confined to television, but has made countless personal appearances at events, school programs and restaurant openings around the glove. By 1999, Ronald McDonald had his own home video series and Internet site. 29 In Australia, where the number of fast food restaurants roughly tripled during the 1990s, one survey revealed that half of the nation’s nine- and ten-year-olds thought that Ronald McDonald knew what kids should eat. 30 A study in the 1990s showed that 96% of American children recognized Ronald McDonald. 31 As the 1990s dawned, Shelby Yastrow, a Senior Vice President at McDonald’s, reported that McDonald’s owed its success to sticking to what it does best. 32 He reported that top management at the corporation “tastes and discusses the sandwiches instead of worrying about the economy, politics and demographic trends.” 33 He also advocated a program of knowing when to leave well enough alone, saying that if you are happy with where you are in the present, figure out how you got to that point and do the same things to prepare for the future. Shelby did, however, acknowledge the need to embrace change when necessary. By the early 1990s customers’ new tastes and nutritional concerns compelled McDonald’s to expand its product range to include salads, decaffeinated coffee, skim or two percent milk, and fish and chicken sandwiches. All was not perfect for McDonald’s in the nineties. It had become the target of activists and advocacy groups that criticized the fast food giant for a range of evils
McDonald's Corporation and the Issue of Health and Nutrition - page 10
10 including: paying low employee wages and providing poor working conditions, resisting unionization attempts, encouraging low farm labor wages, enabling (albeit passively) cruelty to animals through its reliance on so-called factory farms that mass-produce meat and poultry, and providing unhealthy food high in fat and sugar. The first major attack on McDonald’s came from a Greenpeace activist group in England in a pamphlet titled, “What’s Wrong with McDonald’s? What They Don’t Want You to Know.” Labeled as libelous by McDonald’s, a major court case against two of the protestors turned into a classic David-and-Goliath struggle in which McDonald’s was cast at the corporate bully. Even though the final judgment in the case favored McDonald’s, its reputation suffered internationally, precipitating the first institutional acknowledgement of a link between the type of food McDonald’s served and heart disease in the form of the ruling made by an English appellate court. 34 The publicity was persistently negative and globally pervasive, with McDonald’s cast, for the first time, as a transnational villain. The stage was set for a long and ugly battle on the issue of fast food, nutrition, and health. 1.5 The Health and Nutrition Movement Gains Momentum: Late 1990s -2003 The success and ubiquity of the fast food industry catapulted it into the increasingly prominent public health issue of nutrition and obesity in the developed world. In the new millennium, McDonald's remains the world’s most recognized brand —more so than the Coca-Cola™ . 35 While cookie, candy, and ice cream manufacturing companies are ostensibly all in the business of producing food with questionable nutritional value, advocacy groups focused on nutrition and obesity concerns are much more interested in challenging the major fast food players. By the mid-2000s, one in four Americans visited a fast food restaurant every day and spent more than ever. While
You're reading the first 10 out of 68 pages of this docs, please download or login to readmore.

People are reading about...