People Innovation Excellence

Mc Donald’s and Culture in Asia

Article #1

China: food safety concerns undermine brand

Food safety comes near the top of any league table of public concerns in China, so McDonald’s was hit hard when an undercover television investigation accused the company last July of using a mainland supplier that relabelled expired meat, writes Patti Waldmeir in Shanghai. McDonald’s said earlier this month that same store sales in the Asia-Pacific, Middle East and Africa region continued to suffer the effects of the scandal, dropping 4.8 per cent in the fourth quarter, year on year. “Consumers in China are still leery of the brand and haven’t really been convinced that McDonald’s has supply chain issues under control,” said Benjamin Cavender of China Market Research in Shanghai. Foreign fast food brands such as McDonald’s and Yum’s KFC have long enjoyed a reputation for cleanliness, quality and safety on the mainland, which has faced a string of food quality scandals in recent years. These included the scandal of melamine in infant milk, which killed six babies and sickened several hundred thousand. But recently, supplier scandals have hit both big US chains hard, with KFC facing several successive allegations of substandard supplier practices. Yum Brands was also targeted in the July expired meal allegations. The Shanghai government responded to the media exposé by closing down the affected factory of Shanghai Husi Food Co, a subsidiary of US food group OSI, and detaining staff. Problems with food quality have also coincided with other trends that have challenged western fast-food brands, industry analysts say. “Fast-food consumers in China have shifted away from their original curiosity about western fast food, and nowadays they are pickier and more focused on health,” said Shi Jun, catering industry analyst at Beijing-based Alliance PKU Management. 2,000 Number of McDonald’s outlets in China. KFC has 4,600 “McDonald’s is facing more pressure from fast-casual restaurants and Chinese quick-service chains as consumers look at alternatives that they increasingly view as more healthful and safer,” said Mr Cavender. KFC remains the clear market leader with 4,600 outlets, more than double the 2,000 McDonald’s. But Dicos, a Taiwanese-owned fast-food chain strongest in lower-tier cities, with cheaper menu, recently eclipsed the US burger chain with 2,200 stores. It planned to have nearly 3,000 by the end of last year.

Additional reporting by Zhang Yan in Shanghai

Article #2

Japan: consumer backlash against cost cuts McDonald’s Japan had its own management shake-up in the summer of 2013 when the US head office brought in Sarah Casanova, a 24-year McDonald’s veteran, to run the local unit. The chain had enjoyed nearly a decade of strong growth in its second-biggest market. But sales in Japan, with some 3,100 outlets, started slowing as consumers became disgruntled with its service and food offerings, writes Kana Inagaki in Tokyo. The McDonald’s brand became synonymous with cost cuts and a push for efficiency, highlighted by the backlash in late 2012 when Japanese stores pulled menus from its counters to shorten the time taken by customers placing orders. Angry consumers punished the chain by dragging its sales down for almost all of 2013, excluding May and June. But instead of stemming the slide in sales, Ms Casanova’s term has been plagued by a series of troubles that began with a chicken safety scare at its China-based supplier last July. Delays in imports of US potatoes forced the chain to ration sales of its French fries in December. The problems were capped by a flood of complaints that came to light this month when objects, from a human tooth to pieces of vinyl and a bracelet, were found inside its products. McDonald’s Japan, which is half owned by the US group, now expects its first annual loss in 11 years, totalling Y17bn ($144m), after sales tumbled by double-digits since July. “McDonald’s is already no longer a must-go place. They must regain consumer trust or else people would just not be interested in them any more,” said Nomura analyst Kyoichiro Shigemura. Ms Casanova has promised steps to ensure food safety through increased audits of suppliers. McDonald’s Japan also plans to remodel its stores and offer a wider line-up of menus, with better pricing. But analysts say it will be a hard road ahead to restore confidence in a market known for its finicky and picky consumers. When Ms Casanova appeared at a news conference in July, she was criticised for failing to appear apologetic enough. Three months later when she spoke again, she wore a dark suit with her hairstyle in a tight updo. “A new start is always a good thing,” she said.

About the company : McDonald’s (or simply as McD and Micky D’s) is an American hamburger and fast food restaurant chain. McDonald’s predominantly sells hamburgers, various types of chickenchicken sandwichesFrench friessoft drinksbreakfast items, and desserts. In most markets, McDonald’s offers salads and vegetarian items, wraps and other localized fare. On a seasonal basis, McDonald’s offers the McRib sandwich. Some speculate the seasonality of the McRib adds to its appeal.

Culture which defined by Cambridge English Dictionary states that culture is the way of life, especially the general customs and beliefs, of a particular group of people at a particular time. Some of the experts defines culture in a few different meanings, such as :

Lehman, Himstreet, dan Batty defines culture as a collection of some life experience that exist in a particular group of people. The life experience in question could be a belief, behavior, and lifestyle of one’s community.

Koentjaraningrat defines culture as a system of ideas and taste, an action and creation which produced by humans in the life of the community, which made it his own by learning.

About The Case

            The chinese people tend to prioritize the cleanliness and the safety of the food they consume. When it is known that the famous fast-food chain like McD using food ingredients that has been expired, the Chinese community is very angry and cause a decrease in the value of the McD itself. The neglect of a famous restaurant like McD to use expired food ingredients caused a huge loss. Such a big losses require mcd to regain consumer trust to the restaurant. For the big failure of McD in china, local restaurants, such as Taiwanese-owned fast-food,  Dicos start to take over the fast-food consumers in china with total outlets almost reach 3000 outlets.

After the case that happened in china, now i will switch to discuss about case which happened in japan. Apparently, the main problem that occurs between these two cases is the product hygiene itself, which in the case of Japan also found material that is not feasible consumption, such as human teeth and beads from the bracelet. The Japanese people are also frustrated because McD is trying to cut costs for the efficiency of the restaurant itself, rather than having a good effect on the contrary, which can be seen from the greatest losses that occurred in 2013. The negligence of McD to operate well caused the Japanese society to reduce their visits to the restaurants. It would be a challenge to restore the consumer trust to return to the restaurant.

A hygiene culture highly prized by both examples of the countries being a double-edged sword for restaurants such as McD. Instead of trying to increase profits by using products of inferior quality actually resulted in deep losses to the restaurant and resulted in the loss of public confidence in the restaurant.

In an effort to restore consumer confidence, McD’s restaurant must convince the public that the scandal that has happened will not be repeated again and promised to use quality and decent food.

As for McD as a large fast-food restorant, can try to restore the trust of it’s customers by doing :

a). Apologize to customers through various media, both mass media and social media.

b). Making sure no more mistakes in the future.

c). Provide compensation to consumers by providing promotions as a symbol of apology.

d). Listen to complaints from consumers and apply them.

The conclusion of these article is that, although McD is a very big company, but still should not neglect the main task, which is to give the best satisfaction to the consumer, because without consumers then McD will not be as big as now. Besides that McD must also understand the differences from the culture of each counties, because different countries have different cultures as well, and understanding the culture will bring great benefits to the company.

Refferences :

(n.d.). Retrieved May 8, 2017, from https://en.wikipedia.org/wiki/Culture: https://en.wikipedia.org/wiki/Culture

(2015, March). Retrieved May 8, 2017, from http://www.spengetahuan.com/2015/03/pengertian-budaya-menurut-para-ahli-lengkap.html:

http://www.spengetahuan.com/2015/03/pengertian-budaya-menurut-para-ahli-lengkap.html

reporters, F. (2015, January 30). Retrieved May 8, 2017, from https://www.ft.com/content/f8ac22fc-a7c1-11e4-8e78-00144feab7de:

https://www.ft.com/content/f8ac22fc-a7c1-11e4-8e78-00144feab7de


Published at :
Written By
Selly Novela, ST, MM
IIRC | SoBM/IBM
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