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SITUATION ANALYSIS

07-03-2013 2McDonald's Beef Fries ControversyGroup 2

MC DONALDS HISTORY1937- Mc Donald's was started by two brothers, Richard and

Maurice Mc Donald's in California.

1954- Ray Kroc established a franchising company with Mc

Donald's under the name Mc Donald's System Inc.

1965- Mc Donald's went public.

1998- it had over 25000 restaurants in 116 countriesserving more than 1.5 billion customers.

2001- it had 28 outlets in India spread across tier-A cities.

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SITUATION ANALYSIS

07-03-2013 3McDonald's Beef Fries ControversyGroup 2

ALLEGATIONS NUTRITION

ENVIRONMENT

ADVERTISING

EMPLOYMENT

ANIMALS

EXPANSION

FREE SPEECH

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SITUATION ANALYSIS

07-03-2013 4McDonald's Beef Fries ControversyGroup 2

BEEF FRIES CONTROVERSY TOOK PLACE IN 2000

U.S BASED HINDU JAIN SOFTWARE ENGINEER Mr.

SHAH READ AN ARTICLE ABOUT MC DONALDSFRENCH FRIES CONTAINING BEEF

ON AN ENQUIRY MC DONALDS RESPONDED THAT

THEY DO USE SMALL AMOUNT OF BEEF FLAVOUR AS

A INGREDIENT

THE COMPANY JUSTIFIED ITS ARGUMENT BY SAYING

THAT THERE WAS NO LAW TO DISCLOSE THE

INGREDIENTS INPUT

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SITUATION ANALYSIS

07-03-2013 5McDonald's Beef Fries ControversyGroup 2

VARIOUS LAW SUITS WERE FILED AGAINST COMPANY

FINALLY ENDED UP APPOLOGISING AND PAYING A

COMPENSATION OF 10 MILLION US DOLLARS

ALSO IT PAID 4 MILLION US DOLLARS TO 12 PEOPLEWHO HAD FIED THE LAW SUITS

THEY GAVE ADVERTISEMENTS IN NEWS PAPERS

ADMITTING THEIR MISTAKE

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SITUATION ANALYSIS

07-03-2013 6McDonald's Beef Fries ControversyGroup 2

SITUATION IN INDIA LOT OF PROTEST BY VARIOUS POLITICAL AS WELL AS

RELIGIOUS GROUPS SUCH AS SHIV SENA, BAJARANG DAL,

VISHWA HINDU PARISHAD PETITION WAS FILED TO CLOSE DOWN ALL THE OUTLETS IN

INDIA

LOT OF CONFUSION WHETHER THE FRIES BEING SUPPLIED

IN INDIA HAD THE BEEF CONTENT OR NOT RUMUORS HAD IT THAT THESE FRIES INGRIDIENTS WERE

THE SAME AS BEING SOURCED FROM US

WHEN BMC AND FDA CONDUCTED THE TEST IT GAVE

NEGATIVE RESULTS FOR THE BEEF CONTENT

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Problem Identification

07-03-2013 7McDonald's Beef Fries ControversyGroup 2

i. Unethical behaviorii. No word of caution.

iii. Passing the buck attitude.

iv. Loopholes in FDA regulations.v. Inconsiderate towards employees.

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StrengthAstute sense of business.

Globalised.

Financially stable.

WeaknessLack of innovation in

products.

Inconsideration towardsemployees.

PR was not very effective.

OpportunityHuge Market.Only a section of society

was hurt.

ThreatsLoss of faith.Competition.Duplication.

SWOTAnalysis

07-03-2013 8McDonald's Beef Fries ControversyGroup 2

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Solutions

07-03-2013 9McDonald's Beef Fries ControversyGroup 2

i. Prompt actions should have been taken

ii. Innovation in vegetarian product line

iii. Proper labelling of ingredients

iv. Exhibit sensitivity towards peoples' sentimentsv. Create a better work environment

vi. 24/7 customer helpline

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Nutrition Environment

Advertising Employment

Animals Expansion

Free Speech

Q & A

07-03-2013 10McDonald's Beef Fries ControversyGroup 2

Q1) Analyse the various allegations levelled against McDonald's before the French

fries controversy. What perceptual processes contributed to so much hostilityand criticism despite McDonald's being the number one fast-food chain in the

world?

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Q & A

07-03-2013 11McDonald's Beef Fries ControversyGroup 2

Q2) Discuss the French fries controversy and critically comment on the company's

stand that it had never claimed the fries were vegetarian. Do you think thecompany handled the controversy effectively from the point of management of

rumour?

French Fries-Tallow

Companies point of view Customer point of view

NO!! They were not

Losing Indian Market

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Q & A

07-03-2013 12McDonald's Beef Fries ControversyGroup 2

a. Non acceptance b. Conditional apology

c. FDA to shield d. Compensation

E. Advertisement as medium of apology f. Undercover operation

Q3) Discuss the steps taken by McDonald's to play down the French fries

controversy and critically comment whether the company will be able to come

out this unscathed.

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07-03-2013 McDonald's Beef Fries ControversyGroup 2

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Learning's & Concepts

07-03-2013 14McDonald's Beef Fries ControversyGroup 2

Social Psychology: Respecting religious beliefs andsentiments.

Openness

Clarity- Do not play with words in public.

Do not give conditional apologies

Never support your excuses.

Value individuals perception.

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Learning's & Concepts

07-03-2013 15McDonald's Beef Fries ControversyGroup 2

Anthropology: Study consumer behavior while offshoringand exploring markets.

Job Satisfaction: (Intrinsic factors):

Low wages, Curtailing workers right, poor safetyconditions, kitchen flooded with sewage, understaffing,

few breaks, Illegal hours, Curtailing workers rights.

Mc. Donalds had Self-Serving Bias.

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