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A Study on McDonald’s Adopting an Environmentally Friendly Business Model
Introduction
Protecting the environment is very important to many people today. They are concerned with making sure that people treat the earth right through actions like creating less pollution and recycling. They are also concerned with how the way a business operates may affect the environment.
Body paragraphs
McDonald’s is well aware of these concerns. This is why they have set new goals for sustainability and social responsibility for the business by 2020. Some of their goals include increasing in-restaurant recycling by 50%, serving 100% more fruits, vegetables, low-fat dairy or whole grains in nine of its top markets, supporting sustainable beef production, and purchasing 100% fiber based packaging from either certified or recycled sources.
Adopting this new business model involves a cost for McDonald’s. Their overall business is based on being able to create cheap food that is cheaply produced, and these new goals that they have set are likely to make the cheap food go up in price because it will not be as easily cheaply produced. This may deter a few of their customers who are used to the extremely cheap prices.
McDonald’s is also able to economize through this decision. They know that their millennial customer is increasingly attracted to businesses that practice sustainable business habits. By changing their business model to reflect these views, they will most likely attract more customers into their restaurants and increase their profits.
This new business model offers incentives for McDonald’s customers. Their customers who are concerned with the environment will see this move as a good thing and will probably go to McDonald’s more often because the restaurant reflects their views and they feel as if their voices are being heard.
As there is an increasingly bigger amount of emphasis on sustainability and protecting the environment, more businesses are likely to follow in McDonald’s footsteps. These other businesses will also want a share in the success of McDonald’s and claim some of their customers back that they may have lost because having a business model of being sustainable was not a top priority to them.
McDonald’s is able to create wealth through voluntary trade. Although the cost of this new model may seem like it would be detrimental and cost a lot up front in comparison with McDonald’s old business model, the company knows that in the long run it will pay off. With an increase in customers who find protecting the earth to be important to the restaurants, McDonald’s profits will sharply increase. The consequence of this decision lies in the future. Customers are more likely to go to a business that they feel matches their views. More businesses will try and follow McDonald’s lead to make their restaurants more sustainable in order to attract these types of customers.
Conclusion
The author’s view that this decision is a good thing for McDonald’s is correct. With an increasingly large focus on protecting the environment, more people will realize the importance of what McDonald’s is trying to do. This will lead to an even bigger increase in customers, in addition to the millennial customers that will already flock to the restaurant. In this case, the food that McDonald’s produces would be considered a pure private good because its use by one person lowers the quantity available to someone else (rival) and it is possible to prevent someone from enjoying its benefits (excludable). In the future, businesses are likely to try to become more sustainable for the sake of staying profitable as this becomes more important of an issue to an increasingly large amount of their customers.
