Introduction
Globalization present different opportunities and challenges to corporate organizations at the global market. McDonalds has enjoyed market leadership in serving burgers for decades.
However, the company has faced challenges associated with its operations in the Scandinavian countries and in the United Kingdom (UK). The company has attributed the challenges to several theories. In the Scandinavian countries, the legal environment hinders advertising that targets children.
In the recent past, the company has faced backlash from people who question the source of materials it uses to make products. Environmentalist organizations and animal rights groups have also continued to present challenges to the business chain. The UK branch has faced difficult moments since 1997 when it lodged litigation in a libel case against two former workers.
Critics have deeply compromised the image of McDonalds in both the UK and Scandinavian countries. The aggressive advertising and marketing efforts have not helped so much in cleaning the compromised image. The business chain continues to struggle because of problems associated with its compromised brand.
McDonalds is seeking to rebrand in the Scandinavian countries and in the UK in order to reposition itself for expansion. Much as McDonalds has continued to operate globally realizing huge profits in some market regions, the food chain business has struggled in the Scandinavian countries and in the UK markets and should rebrand in order to escalate its profits.
Re – Branding at McDonalds
McDonalds has struggled to clean its image through rebranding. It is notable that a large proportion of McDonald’s profits emanate from the sale of fast foods. However, the recognition that obesity has become a major disease globally has affected the UK market. The recognition has made most clients to become more health conscious (Haig & Haig, 2011).
Therefore, potential clients avoid buying McDonalds burgers thus affecting the company’s sales. It is noteworthy that the company use livestock to produce foods. Critics have argued that the livestock used by the company are fed on genetically modified materials.
This has affected the image of the company thus causing it to undertake aggressive rebranding initiatives (McDonalds, 2010). The rebranding initiatives have focused on cleaning the image of the company in order to escalate the firm’s profits in both markets.
McDonalds has struggled with efforts to redeem its image since the beginning of 2000. The company has continually upheld views that its products including beef and bacon feeds on genuine grains. The company has worked hard to correct the perceptions created by environmental activists that it uses genetically modified grains.
The company has worked with farmers to assure the public and critics that its products are produced using quality raw materials (McDonalds, 2010). The rebranding effort was necessary because the company started losing huge proportions of its client base.
Particularly, the company started losing its health conscious client base including youths who feared eating its burgers (Haig & Haig, 2011). The clients were concerned that burgers cooked using beef and bacon fed on genetically modified foods was potentially harmful to their health.
McDonalds is also seeking to rebrand in these markets through minimizing carbon emissions. This program has focused on the emissions generated by cattle it uses in making burgers (McDonalds Corporation, 2011). Indeed, the rebranding effort was timely because many studies had indicated that cattle generated about four percent of carbon emissions.
It is notable that environmental organizations such as Greenpeace have repeatedly criticized McDonalds for its carbon footprints. Therefore, the rebranding effort, which focuses on sustainability, seeks to assure the public that the company is implementing programs aimed at reducing carbon emissions.
McDonalds has also worked with suppliers and chain owners to promote energy efficiency in its processes (McDonalds Corporation, 2011). The company branding on energy efficiency efforts also enabled it to receive the Carbon Trust Standard because it minimized its carbon emissions significantly.
This rebranding effort has been critical to the success of the chain store because it informs clients of the company’s corporate social responsibility.
In addition, McDonalds rebranding has focused on assuring the clients that the fish it uses in making Filet – O – Fish together with Fish Finger products in the UK and Scandinavian countries’ markets are obtained from sustainable sources. The company has made it clear in the rebranding efforts that the fish are sourced from suppliers who employ sustainable fish keeping practices (The McDonalds, 2012).
The rebranding initiatives have been critical in ensuring that the company maintains a positive image on how it sources for its raw materials. It is notable that this has been the greatest concern of worried consumers.
The company has also ensured that the rebranding effort it seeks to undertake promotes transparency in the whole of its systems. For example, the company has disclosed to clients that it sources fries from McCain suppliers. It is notable that this is the greatest potato supplier in the UK market (The McDonalds, 2012).
Furthermore, McDonalds has indicated that it sources additional potatoes for fries from diverse farmers in the regions. The company rebranding has also focused on informing the public that the fries are prepared using vegetable oil. The vegetable oil lacks the cholesterol, which has been a concern for many health conscious individuals in the past.
The company has also engaged in aggressive rebranding efforts aimed at informing the public that it has drastically reduced the salt in its fry’s products (Haig & Haig, 2011). The rebranding program has also been important for the company because it enables the firm provide relevant and adequate information regarding the quality of its fries to the health conscious clients and potential customers (McDonalds, 2010).
However, McDonalds has faced the greatest challenge in rebranding initiatives focused on its buns and muffins. This has been a core concern to many clients who continuously seek information on where the chain store sources the bread for the products (McDonalds, 2010). McDonalds has failed to name the source of the bread.
The food chain store has only been able to indicate that the materials it sources the resources from Heywood and Banbury. The company has failed to indicate the source of grains used in bakeries.
However, it has maintained that the grains originate from genetically modified crops. This is one area that McDonalds has been seeking to rebrand but has significantly failed. However, it has rebranded the grains and bread for making buns originated from genuine crops (McDonalds, 2010).
The company’s rebranding initiatives has enabled it deal with criticisms from environmental organizations for its contribution to the destruction of Amazon rainforest. Greenpeace activities campaigned against the company by storming its restaurants (Melewar, 2008). However, the company has focused on rebranding through building its ethical stance on the purchase of meat produced by local farmers.
The company’s passion for ethical practices has enabled it to redeem its image against criticisms focusing on the chicken rearing conditions, which many people have argued are inappropriate. It has rebranded its image as a company that buys eggs in the local markets. Free-range chicken farmers fulfill the company’s egg requirements (The McDonalds, 2012).
However, the rebranding efforts have attracted criticisms because the company also purchase chicken from Sun Valley, which is in the UK and Moy Park located in Northern Ireland. Cargill, which is the American firm owing the chicken companies has attracted criticisms for its intensive chicken rearing methods (Kincheloe, 2002). Production of meat remains the fundamental purpose of the intensive methods.
Critics have argued that the intensive farming methods deny chicken opportunities to move about. The method encloses chicken in the warehouses. Furthermore, the Sun Valley image has attracted criticisms regarding poor conditions in its supply branches. Therefore, the fact that McDonald’s purchases most of the chicken from the companies has led to criticisms for its processes (Kincheloe, 2002).
Re – Branding and Structural Control
McDonalds has continued its rebranding initiatives in line with the structural control issues. The UK branch of the company operates in a marketplace with less restrictions and regulations on advertising. However, advertisements targeting children have remained unpopular because most critics have argued that burgers escalate the rate of developing obesity among children (McDonalds Corporation, 2011).
Therefore, although McDonalds initially targeted children in its advertisements in a market where advertising in not strictly regulated, it has had to rebrand with a focus on teenagers and youths.
The rebranding initiatives targeting teenagers and youths emerged out of the need to disassociate the company from children with obesity (Hill & Jones, 2012). Therefore, the company’s rebranding efforts seeks to reposition it at the marketplace as a fast food service that generates products with minimal chances of causing obesity.
The rebranding efforts have also necessitated a change in the distribution issues. Particularly, the company’s rebranding activities has focused on the supply chain management, where it requires suppliers to conform to its sustainability practices (Budelmann, Kim & Wozniak, 2010).
The suppliers sign a code of conduct, which formalizes their agreement to uphold sustainability practices championed by McDonalds. Furthermore, the rebranding that focuses on McDonalds distribution issues affirms that its suppliers observe human rights, business integrity, and appropriate workplace conditions (The McDonalds, 2012).
Application of Technology in Re- Branding
McDonalds required a shift in the media and communication technologies to restore the declining profits in the UK and Scandinavian countries due to a bad image.
The company invested billions in technology based branding where the communication specialists had to develop strategies for responding to the shifting climate of opinion. The media and communication branding strategy has focused on dissociating McDonalds from unhealthy children such as those suffering from obesity (Deng, 2009).
In the company’s “Plan to Win” strategy, the media and communication team focused their strategies on revitalizing the five P’s approach to marketing (McDonalds, n.d).
The media and communication also focused the branding initiatives towards designing restaurants outlook with the latest messages (Melewar, 2008). The team provided a facelift to McDonald’s staff outlook by constantly redesigning their uniforms. The company constantly redesigns packaging materials as a rebranding effort.
McDonalds rebranding has continuously moved away from targeting children. The shift has seen the company rebranding efforts target teenagers (Botterill and Kline, 2007). This has been of great significance to the company since a huge proportion of its clients include teenagers and youths. The rebranding has therefore helped the company to focus on the largest target group.
The rebranding initiatives also lead to the development of “I’m Lovin’ it” strap line advertisement endorsed by Justin Timberlake (Botterill and Kline, 2007). Furthermore, the involvement of teenage skater Tony Hawks in McDonalds rebranding efforts has enabled the company to communicate with the main target audience.
However, it appears that the company’s media and communication team have to do more work in order to reach a larger target group of the millennium. The company’s McWrap has resonated well with this important client group. The company rebranding must therefore focus on meeting the needs of the millennia group (Deng, 2009).
Their needs include having access to a variety of burgers, customization, and opportunities to personalize their eating experiences. Furthermore, the company must continue to rebrand its foods as fresh and organic.
It is also notable the teenagers and youths consciousness to social change issues must compel the media and communication team to rebrand McDonalds sustainability and corporate social responsibility programs robustly (Botterill and Kline, 2007).
For example, the communication specialists rebranding of sources of livestock used at McDonalds must rebrand the farming practices as highly sustainable and environmentally sensitive. The application of well-informed rebranding efforts based on technology remains crucial in expanding the client base in these markets (Deng, 2009).
Re – Branding and Globalization
McDonalds has faced diverse challenges associated with globalization. The expansion into other global markets has been unprecedented. The company opened additional stores in the UK market. However, the company has faced serious challenges in operating its businesses in the Scandinavian countries.
The challenges have forced the company to close some restaurants and food eating outlets in the countries because of dwindling profits (Botterill and Kline, 2007). It is notable that the challenges partly emanated from the company’s bad image in the region. Therefore, it had to close the businesses in countries such as Sweden.
Rebranding activities have focused on cleaning the image of the company in the Scandinavian countries in order to escalate sales (Botterill and Kline, 2007). The critics in such countries have had concerns with the livestock sources of the company’s materials. They have had critics emanating from animal rights groups who have questioned the company’s livestock management initiatives.
The criticisms have been associated with the perceptions that McDonalds is flouting several animal rights (Botterill and Kline, 2007). Furthermore, the groups have raised concerns with the perceptions that the company buys livestock products from animals fed on genetically modified foods.
Re – Branding in Cross – Cultural Markets
McDonalds handling of cross-cultural differences has always been excellent. The company has ensured that its programs respect the culture of all its clients. The power question has not emerged as a central issue in the company although it operates in cross cultures. The company is run through franchises managed at the local markets.
The local markets in every region have unique cultural characteristics, which the local power structure appreciates in recruitments. The management at the local markets has not promoted the existence of cross-cultural challenges. However, the company’s head offices have experienced strong cross – cultural diversities in management, which affects the rebranding efforts.
Rebranding and Identity McDonalds has done tremendously well in rebranding its identity at the local and global marketplace. The company has promoted the adoption of the brands developed by the head offices at all the franchises around the globe (Haig & Haig, 2011). Furthermore, it has rebranded itself as an organization that appreciates diversity and ensures inclusivity to staff and clients.
The company has ensured that it promotes employment of staff from all ethnicities, genders, religion, sexuality, and class. It is notable that the company has not attracted criticisms based on discrimination accusations (McDonalds, 2013). Furthermore, it has ensured that its products continue to meet the needs of its client regardless of their diversities.
Inevitable Rebranding
The progresses in rebranding McDonalds have been inevitable. This has emerged from the perceived need to ensure that the company undertakes rebranding activities that seeks to restore its image and marketplace position. These efforts have seen the company develop diverse strategies to rebrand its services around the globe (Irwin, 2009). The branding initiatives have revolved around the famous trademarks and straplines.
Conclusion
This paper argues that although McDonalds has continued to perform significantly well in the global marketplace, its operations in the UK market and Scandinavian countries market has faced diverse challenges associated with its image. Therefore, the company is seeking to rebrand in these two markets in order to escalate its profits.
The company’s image has previously suffered harm because critics argue that its products are unhealthy. Furthermore, the critics have campaigned against the company because of its association with suppliers and farmers, which do not follow sustainability practices. However, it has also implemented diverse rebranding initiatives seeking to clean its image.
References
Botterill, J., and Kline, S. (2007). Re-branding: the McDonald’s strategy. Web.
Budelmann, K., Kim, Y., & Wozniak, C. (2010). Brand identity essentials: 100 principles for designing logos and building brands. Beverly, Mass: Rockport Publishers.
Deng, T. (2009). McDonald’s New Communication Strategy on Changing Attitudes and Lifestyle. International Journal of Marketing Studies, 1(1), 37 – 42.
Haig, M., & Haig, M. (2011). Brand success: How the world’s top 100 brands thrive and survive. London: Kogan Page.
Hill, C. W. L., & Jones, G. R. (2012). Essentials of strategic management. Mason, Ohio: South-Western/Cengage Learning.
Irwin, D. A. (2009). Free trade under fire. Princeton, N.J: Princeton University Press.
Kincheloe, J. L. (2002). The sign of the burger: McDonald’s and the culture of power. Philadelphia, Pa: Temple Univ. Press.
McDonalds (2010). McDonalds Best Practices: Building a better business through effective environmental practices around the world. Web.
McDonalds Corporation. (2011). Form 10 – K. Web.
McDonalds. (2013). Global Initiatives. Web.
McDonalds. Risk Factors and Cautionary Statement Regarding Forward-Looking Statements. Web.
Melewar, T. (2008). Facets of Corporate Identity: Communication and Reputation. New York, NY: Routledge.
The McDonalds. (2012). The McDonald’s Supplier Code of Conduct. Web.