The Impact of Globalization on Economic Decisions

The Impact of Globalization on Economic Decisions

ntroduction and Alignment

The case study will explore both macroeconomic and microeconomic influences on a firm. We will look at McDonald’s and the overall impact of globalization on its business model. Many variables affect McDonald’s business, including economic growth, stagnation, cultural, and geopolitical factors that have a heavy influence on worldwide operations.

Upon completion of this assignment, you should be able to:

• Explain the relationship and influences of macroeconomics and microeconomics on businesses and their managers.
• Explain the impact of trade policies on both international trade and domestic economies.

Resources

• Bible
• Textbook: Economics for Managers

Background Information

McDonald’s and its competitors must try to determine which variables – for example, price, quality, health concerns, convenience, speed of delivery, and restaurant ambiance – have the greatest influence on consumer demand. The uncertainty related to the fast-food industry and the competitors in this oligopolistic environment also has a significant macroeconomic impact.

Instructions

1. In Chapter 16 of Economics for Managers, read the case study Strong Headwinds for McDonald’s, then answer the following questions:
   1. Describe the macroeconomic factors that caused headwinds for McDonalds’ in 2012. Please include sources with your answer.
   2. Give examples of oligopolistic behavior among the rivals in the fast-food industry.
   3. Regarding the discussion of when McDonald’s introduced its Dollar Menu strategy in the fall of 2002, why was the company assuming or hoping that the demand for its products was elastic? Did this appear to be the case?
   4. Based on the case, how did the McDonald’s development of its mini-restaurants improve its overall profitability?
   5. What role did the policies of various governments play in influencing the international expansion strategies of McDonald’s?
2. Write a 500-word paper answering the preceding questions.
3. Incorporate a minimum of three sources in addition to the text in this assignment for a total of four sources. Your sources may include scholarly sources, credible newspapers, trade journals, or websites. Be sure to use OCLS to find these sources.
4. Use APA formatting for your paper and citations.
5. When you’ve completed your assignment, save a copy for yourself and submit a copy to your instructor using the Dropbox by the end of the workshop.

Solution Preview

Question 1
Following 2001 the drive-thru food industry was stricken with changing shopper taste inclinations as customers turned out to be more worried about solid substance and dietary benefit. Narrative motion pictures like “Super-Size Me” brought issues to the light of common items in the McDonalds menu line up. Opponents in the market like Subway started to offer nourishments that utilized this worry by publicizing a more advantageous approach to eat drive-thru food as expressed in an ongoing article.

(622 words)