How Mcdonald is Using a Business Model that is Environmental Friendly

Introduction: The Importance of Environmental Protection

Protecting the environment is very important to many people today. They are concerned with making sure that people treat the earth right through things like creating less pollution and recycling. They are also concerned with how the way a business operates may affect the environment.

McDonald's Commitment to Sustainability

'How McDonald's is Using a Business Model that is Environmentally Friendly'

McDonald's is well aware of these concerns. This is why they 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 (McDonald's, 2020).

The Financial Implications of a Sustainable Model

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. However, the company believes that the long-term benefits will outweigh these initial costs. By investing in sustainability, McDonald's is positioning itself as a leader in responsible business practices, which may result in a stronger brand reputation (Smith, 2019).

Appealing to the Millennial Consumer

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. According to a Nielsen report, 73% of millennials are willing to pay more for sustainable goods (Nielsen, 2015). This demographic shift underscores the importance of McDonald's sustainability efforts.

Incentives for Eco-Conscious Customers

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. By aligning its values with those of its customers, McDonald's is not only meeting consumer expectations but also fostering brand loyalty.

The Ripple Effect on the Industry

As there is an increasingly bigger 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. The trend toward sustainability is becoming a competitive advantage, pushing other companies to innovate and adopt similar practices (Jones, 2020).

Long-term Profitability through Sustainability

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 upfront 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 company's investment in sustainability is not just a trend but a strategic decision to ensure future profitability and relevance in a changing market.

The Future of Business and Environmental Responsibility

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. As environmental issues become more pressing, companies that ignore this shift may find themselves at a disadvantage.

Conclusion: The Positive Impact of McDonald's Decision

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. This article relates to class because we have discussed different classifications of goods. 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.

References

Jones, M. (2020). The Business Case for Sustainability in the Fast Food Industry. Green Business Journal, 12(3), 45-58.

McDonald's. (2020). Our Sustainability Goals. Retrieved from https://www.mcdonalds.com/sustainability

Nielsen. (2015). The Sustainability Imperative: New Insights on Consumer Expectations. Retrieved from https://www.nielsen.com/us/en/insights/report/2015/the-sustainability-imperative/

Smith, J. (2019). Sustainable Practices and Profitability. Business Review, 8(2), 22-30.