McDonald’s Packaging Crisis

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McDonald’s Packaging Crisis

McDonald is regarded as the world’s largest food chain. Current statistics indicate that on average, close to sixty eight million customers are served by the company all over the world on a daily basis. With its headquarters in Oak Brook, Illinois, United States of America, the company started on humble beginnings dating back to the year 1940. The company started as barbeque restaurant being run by Richard and Maurice McDonald. Ray Kroc became a partner in the year 1955 and later purchased the entire entity and oversaw its worldwide growth. However, with growth, comes along inherent issues. McDonald has been faced by a myriad of issues with one of the most intense being the packaging crisis. The polystyrene “clamshell” sandwich containers used by the company were deemed as environmental pollutants even though the containers represented a small percentage of the entire municipal solid waste (McDonald’s Corporation, 1990).

The company endeavored in undertaking several steps aimed at alleviating the crisis. The first step undertaken by the company involved the commissioning of Stanford Research Institute with the mandate of undertaking a conclusive research on the environmental impact of the polystyrene “clamshell” sandwich containers. The results were to be compared with paperboard packaging. The research evaluated the various aspects of the two alternatives involved from the time of manufacture through disposal. The Stanford Research Institute found that the plastic packaging system was preferable due to its low environmental impact. The underlying reasoning was that the covering of the paperboard rendered it un-recyclable whereas the polystyrene was recyclable and the production process utilized minimal energy.

The company took up the environmental challenge as an opportunity to come up with a responsible environmental strategy. The underlying endeavor of the company was to design a dynamic capability leading into a culture of making environmental action a going concern within the company encompassing the entire company’s activities. By engaging with the Environmental Defense Fund (EDF), the company altered its conventional linkages with the market with the introduction of environmental concerns throughout the company’s value chain. The Environmental Defense Fund (EDF) as a non-market environment did not have the intention of being rewarded for its involvement with the strategy (Environmental Defense Fund and McDonald’s Corporation, 1991).

The recommended course of action for the company is engaging with the Environmental Defense Fund (EDF). By dealing with a non-market, the company was able to improve the image and quality of its chain system. The image change was facilitated by the resulting improvement in terms of environmental concerns. There was an immense increase on the number of boxes collected by the suppliers, in addition to the creation of a market for the recycled material. The company realized the first-mover advantage in comparison to its competitors. This was resultant of the privileged association with non-market players (Stillwell, Contz, Kopf, and Montrome, 1991).

The company was able to accomplish three goals by its association with the Environmental Defense Fund (EDF). The company was able to perceive the underlying issues as being significant in the company’s entire value chain activities. With this regard, all solutions to the underlying problems were to be incremental and complementary to the other procedures and measures undertaken by the company. The company was able to make environmental responsibility a going concern in the same respect as conventional business conduct. The company was therefore able to win back the trust of its clients and thus repair its image. This is indicated by the positive response depicted by customers in depositing recyclable material in containers and the increase in company sales.

 

References

Environmental Defense Fund and McDonald’s Corporation.(1991). “Waste Reduction Task Force Final Report,” Oak Brook, IL: McDonald’s.

McDonald’s Corporation. (1990). McDonald’s Packaging — The Facts. Oak Brook, IL: McDonald’s.

Stillwell, J., Contz, C., Kopf, P., and Montrome, M. (1991). Packaging for the Environment, New York: American Management Association.

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