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Does race affect Mcdonalds’ Customer Base?

Fast food, and more specifically McDonalds, is purchased more by certain races. Let us go into detail as to why that may be.

An Oxford study showed that the majority of people eating fast food do so within 1 mile of home. The same study showed that the percentage of  McDonalds built in low-income neighborhoods was significantly higher than in high income areas. Suburban areas with more white collar workers with higher incomes have less fast food places simply because they can afford better food (this shows that McDonalds’ food is an inferior good). Whereas in low income areas, often with a majority of black or latino residents, people need cheaper food; there are so many McDonalds packed into one area these minorities gravitate towards it for a cheap meal.

Hispanics, African Americans, and whites make up a very large portion of McDonalds customers. These races (especially hispanic and African American) also dominate many inner-city, low income areas where McDonalds thrives. While McDonalds is not tailored to appeal to a specific race, a large percentage of its customers are young, poor minorities. Because of this, McDonalds has began shifting its advertising to appeal to minorities. In addition, McDonalds recently began accepting food stamps (EBT); minorities make up the majority of the recipients of this kind of welfare.

Poor education among minorities contributes to the presence of  low incomes among minorities. Many of these low income citizens will work at McDonalds, and most likely eat at McDonalds, because of the low prices. This creates a positive feedback loop where poorly educated minorities work and eat at the same place; this gives money from the employees right back to McDonalds. The more employees, the more fast food bought, and the more profit for McDonalds. This is why one will see many of these restaurants in urban areas — because corporation executives know that there is a demand for both jobs and food, and they can supply both. This is a win-lose situation as the cycle of poverty is fueled by the presence of this food chain, and by McDonalds’ lust for profit.

Would McDonalds Still Thrive in a Communistic Society? Why or Why Not?

“American Journal of Epidemiology.” Fast-Food Consumption, Diet Quality, and Neighborhood Exposure to Fast Food. Web. 16 May 2012. <http://aje.oxfordjournals.org/content/170/1/29.full&gt;.
“Fast Food Chains Getting Into the Food Stamp Act.” ABC News. ABC News Network. Web. 16 May 2012. <http://abcnews.go.com/blogs/business/2011/09/fast-food-chains-getting-into-the-food-stamp-act/&gt;.
McDonald’s. “McDonalds Restaurants Statistics – Countries Compared.” NationMaster.com. NationMaster. Web. 16 May 2012. <http://www.nationmaster.com/graph/foo_mcd_res-food-mcdonalds-restaurants&gt;.

How does McDonald’s compete in a monopolistic competition?

Monopolistic competition is a market structure where many companies sell similar products, but are not identical. So how has McDonald’s managed to compete with other monopolies? McDonald’s have their own profitable specialty coffee in the form of McCafes, a concept taken from Starbucks. Recently, McDonald’s has remodeled the design of some of there restaurants, replacing their fiberglass tables and industrial steel chairs with wooden tables, comfortable faux leather chairs, and have painted their interiors of muted colors of orange, yellow, and green. McDonald’s not only have borrowed Starbucks’ concept of coffee, but have also begun borrowing the same design and feel. McDonald’s has gone under this remodeling with their restaurants to bring down other top competitors such as Burger King and Wendy’s since they are not as successful and cannot afford such upgrades to their own restaurants.

Non-price competition is a way of how firms attract consumers with factors other than price, such as style, service, or location. So how has McDonald’s used non-price competition to convince customers to come to them instead of other burger places? McDonald’s has over 31,000 restaurants found all worldwide in 119 different countries. McDonald’s has divided their dining areas into separate zones for larger groups, eat-and-run customers, and for those who stay there to rest. McDonald’s has also had many of their locations add a second drive-through to up service both in and outside of the restaurant. McDonald’s has also added flat-screen TV’s to many of their locations despite less than half of the remodeled restaurants will display them.

McDonald’s has not only been trying to beat other top competitors in the burger industry. It has also been competing with restaurants that are not even fast food chains. One of the examples of non fast food chains that McDonald’s has been trying to draw customers away from is Panera Bread. McDonald’s has also been trying to bring customers away from Chipotle, a Mexican chain that was originally owned by McDonald’s until October 2006. As stated before, McDonald’s has also competed with Starbucks Coffee with the selling of their McCafes.

With McDonald’s being able to survive in the monopolistic competition, how has McDonald’s made use of their market power?

What are some good and bad elements of McDonald’s status as a multinational corporation?

What are some good and bad elements of McDonald’s status as a multinational corporation?

McDonald’s is arguably the world’s largest chain of fast food restaurants, boasting more than 33,000 restaurants in over 120 countries around the globe. As a multinational corporation, it has an enormous influence on a number of cultures –but is this a good or a bad thing?

One plus is that a company as giant as this can provide literally thousands of jobs across the world; therefore, McDonald’s can also also set certain service standards applicable to all of its restaurants in each country. This then compels other restaurants in that country to rise to meet or even surpass those standards in order to keep their customers. On the other hand, a job at McDonald’s is nothing to brag about. A slang term, “McJob,” which echoes the restaurant’s very name, was even created to describe jobs that require none to few skills, pay low wages, and offer little chance of advancement within the company. McDonald’s may have created thousands of jobs, but whether they are worth one’s time is a different matter.

Aside from the (perhaps not so desirable) prospect of jobs, McDonald’s world renowned status also allows the corporation to sell its products to literally millions of people every day. What McDonald’s has to offer to these customers is a quick, inexpensive meal acquired by way of an efficient drive-through option. However, in order to make and accept food that is fast and cheap, both restaurant and customer (respectively) must sacrifice opportunity costs such as fresh preparation and health. For food to be fast, it is often cooked and prepackaged ahead of time, and then reheated for delivery. Furthermore, to allow this to happen, the item must also be filled with fats and preserves in order to last throughout the day without getting old. In the long run, the fats and preserves negatively affect the body, leading to obesity and an unhealthy lifestyle. It is bad enough for one country to be accustomed to this, but it becomes increasingly dangerous when other countries, first-world and developing, turn to this damaging approach to eating; if the method becomes even more popular, there is the far-fetched yet realistic possibility that all wholesome, nourishing food may disappear from earth altogether in the future.

McDonald’s food is acceptable, though, if taken at prolonged intervals as the occasional “I don’t have much time” take-away meal. In a case like this, McDonald’s is ideal. People who are on the go do not have to wait long for their food to be prepared, and therefore can spend the extra time being more productive with other duties. McDonald’s helps itself to be more productive, as well, for faster the customers leave, the sooner the restaurants can serve incoming customers. Although the “drive-thru” is a brilliant example of technology, ushering paying customers through without their having to stop, it send a subliminal message of sorts, inadvertently adding an unhealthy pressure to the customers’ time-management psychology. Unfortunately, in this haste to hurry and to be more efficient, people often get caught up in the momentum of working and being productive, so that they end up neglecting other aspects of their lives such as enjoying food, spending time with loved ones, and relaxing. Such activities are soon considered trivial and are gladly sacrificed in the name of success, when they are in fact essential to keeping a low stress-level and to living a full, happy life. This scenario is a common criticism of the typical American lifestyle –a lifestyle that has been rapidly globalized through the ever-growing influence of the company that so substantially represents America: McDonald’s.

Why does McDonalds coke taste better and how does it help them to win the competition in an oligopoly of fast food industry?

 

            Among the big fast food restaurants, why does McDonalds’ coke taste better? That is because McDonalds uses the different syrups and drink fountains while other restaurants which sells Coca-Cola fountain drinks uses the same one. To make fountain drinks, there are objects of scenario: water, syrup, CO2, ratio of ingredients, mix of ingredients, and temperature. Most of the objects are controlled by Coca-Cola or the customers. CO2 is a standard gas that are same everywhere and cannot be different. Ratio and mix of ingredients are set by Coca-Cola Company which is in the fountain machine. The temperature of drink can be changed by customers by adding ices. Therefore there are only two left which can be controlled by McDonalds: water and freshness of syrup.

 

Water is 85% of a fountain drink; therefore if water is bad, you will taste it when you drink the coke. McDonalds knows that and therefore they use osmosis filter to provide the best water in making their products. This is also the reason why their coffee tastes better.

 

Most restaurants use the boxes of coke syrups which are small therefore produce minimal investment.  However, McDonalds is a big company which sells a lot of Coke. So they get delivered their syrup from a tanker truck and store it in a stainless steel cylinder. This big cylinder keeps the syrup fresh and fountain cokes with fresh syrup makes the drink takes better. Not only that, they keep the freshness by cleaning the hoses and machines daily so they won’t let old syrup to sit in these and get mixed with fresh syrups or even let bacteria to grow.

 

How does the McDonalds in Korea uses the efficiency with their factors of productions?

 

http://markproffitt.com/2011/02/15/secret-to-why-mcdonalds-coke-tastes-best/

http://www.huffingtonpost.com/2012/05/10/best-fast-food-restaurants_n_1507319.html#s962521&title=1_Subway_7307

How has McDonalds tried to attain technological progress?

McDonald’s is constantly in the process of improving technology in order to increase profit. In Europe, McDonald’s has started to revolutionize ordering food in a restaurant by exchanging cashiers for a touchscreen computer in which costumers order their own food. With the computer ordering system, costumers will be able to order their food in a faster time allowing for more transactions and more output of food. The fast pace in getting a meal and convenience in paying less for quick service is an appeal to the consumer who wants to spend little and gain more at work. Further, this ordering system    allows McDonald’s to spend less money on employees and less time ordering at the counter and gain more money but obtaining more transactions a day.

In addition, McDonald’s has tackled the technologically advanced society with an interactive billboard. In sweden consumers were able to play a ping pong game on smart phones without having to download an application. The game would then be translated onto a billboard. Those who were able to play for a certain period of time were able to win items from McDonald’s that they desired. The interactive game was a clever and entertaining way to appeal to the tech-savvy people of todays society. This was an advertisement displaying products people could possibly get for free if they played the game and those who did not win would have the desire for a specific item to go out and purchase it themselves. This campaign increased the amount of consumers buying from McDonald’s and contributed to McDonald’s goal of continuing the rise of sales.

Moreover, catering to new social media, McDonald’s entered the world of twitter to attempt to get people to talk about McDonald’s in a positive light. McDonald’s wanted to use twitter to advertise the fresh produce. The twitter campaign, was supposed to allow consumers to advertise and support McDonald’s but with the lack of control over consumer’s tweets, twitter became a place to display criticism towards McDonalds. The twitter disaster displayed that it is important to understand the effects of technology on your audience. Allowing people to give negative feedback destroyed McDonald’s hope for joining twitter, to gain enthusiasm for McDonald’s.  Although, twitter was not the most successful way to utilize technology McDonald’s is constantly strategizing to meet the needs and cater to their audience in order to make a profit.

 

How does McDonald’s determine what technology should be used to promote the brand?

 

http://www.msnbc.msn.com/id/43050933/ns/technology_and_science-innovation/t/mcdonalds-upgrades-cashiers-out-computers/#.T6tV2Z9YtME

http://news.cnet.com/mcdonalds-hires-7000-touch-screen-cashiers/8301

http://www.sharethrough.com/2011/06/mcdonalds-triggers-video-sharing-with-new-technology/

Has McDonalds’ Profit Been Increasing or Decreasing? Why?

First of all, lets discuss profit. McDonalds’ net income has increased by  11% this year. In comparison, Burger King has had a drop in sales the past decade, making far less income per year than its competitor. Let us discuss in detail how McDonalds has prospered while its competitors have had to make some big changes to keep up?

The answer revolves around price wars. While Burger King may offer superior food quality and service, McDonalds has lowered its prices so much that competitors like Burger King cannot match them without a significant drop in food quality.

They have been able to maintain these prices by using economies of scale to obtain low prices for materials and products needed. Fast food suppliers give McDonalds price cuts because they depend on them to buy their product in bulk (ie. cattle farms dropping prices for McDonalds because it is their biggest source of income).

Another reason McDonalds has been able to win the price war with its competitors is because it has a virtually endless supply of unskilled labor. McDonalds is one of the biggest contingent employers in the country, acting as a stepping stone for many who are unsure of what their occupation will be (or who simply have no alternative).

Replacing an employee is simple and easy because so many people are wanting a temporary job at a franchise like McDonalds. Employees basically become commodities as one is the same as the next, and will cost the same (minimum wage). Human capital is not valued. Employees are no longer assets but simply tools to increase productivity and sales.

In conclusion, McDonalds’ profit has been steadily increasing because it has used economies of scale and cheap unskilled labor to win the price war with its competitors.

Does social status/race contribute to McDonalds’ customer base?

Works Cited
“Burger King Holdings, Inc. Reports First Quarter 2012 Results.” Web. <http://www.marketwatch.com/story/burger-king-holdings-inc-reports-first-quarter-2012-results-2012-05-09&gt;.
“Burger King Salaries.” Glassdoor. Web. 09 May 2012. <http://www.glassdoor.com/Salary/Burger-King-Salaries-E7201.htm&gt;.
“McDonald’s Blows past Estimates — Again.” MSNMoney. Web. 09 May 2012. <http://money.msn.com/top-stocks/post.aspx?post=605a2237-437d-432f-a313-ce99140ca09e&gt;.

How did McDonalds win the price war with other fast food companies?

There are so many fast foods restaurants in the nation: Jack in the Box, In-N-OUT, Burger King, Carl’s Jr, Taco Bell, and etc. But how did McDonalds become the largest chain of fast food restaurants in the world that 123 countries have McDonalds? By winning the price war! When people think of place to dine in with few dollars in their wallet, they think of McDonalds the first. McDonalds has 1 dollar menus such as Sausage Biscuit, Small Coffee, Hash Brown, Sausage Burrito, Sausage McMuffin, McDouble, McChicken, Side Salad, Fruit n Yogurt Parfait, Sweet Tea, Ice cream Cone, and etc. Also compared to other fast food restaurant burgers, its burgers are cheaper. The most expensive McDonalds burger is Angus Burger which costs $3.99 only for the sandwich while the most expensive Burger King burger is “The Burger” at a West London branch of the restaurant, and it costs $186 because it is made of Wagyu beef.  How did McDonalds win the war?

           McDonalds used cheap ingredients to produce their foods. Chicken Nuggets, for example, is made of these: corn-fed chicken itself, modified cornstarch to bind the pulverized chicken meat, mono-, tri-, and diglycerides, the emulsifiers which keep the fats and water from separating, dextrose; lecithin (another emulsifier), chicken broth to restore some of the flavor that processing leeches out, yellow corn flour and more modified cornstarch for the batter, cornstarch which is a filler, vegetable shortening, and partially hydrogenated corn oil. McDonalds say they only used white meat, but it is not.

These meats are also mechanically separated meats mixed with great amount of citric acid as a preservative. This acid makes the chicken nuggets and even other foods never decay. Because the food never decays, they can keep the food forever until it is sold. This is how McDonalds can do mass production of their products, sell them at a cheap price, and win the price war.

 

How does McDonalds use the economics of scale to get the cheap ingredients?

 

http://en.wikipedia.org/wiki/List_of_countries_with_McDonald’s_franchises

http://www.mcdonalds.com/us/en/food/meal_bundles/dollar_menu.html

http://www.chacha.com/question/how-much-does-an-angus-burger-meal-cost-at-mcdonalds

http://most-expensive.net/burgers-world

http://www.ireallylikefood.com/728859898/whats-really-in-a-chicken-mcnugget/