U.S. Economy And Globalization
In china, the McDonald’s chicken supply units together with KFC proprietors, Yum Brands Inc. are declared as a threat to the population and the sales of the company affected tremendously by such health scares.
The Chinese market boasts of more than five thousand one hundred Yum restaurants (Baertlein). Yum Brands Inc. is also the largest consumer restaurant operator in China even as McDonald’s is coming up with numerous restaurant chains in the Chinese market (Baertlein).
According to the Chinese authorities, the safety of the Chinese chicken supply especially in the most retail stores have been laced with excessive chemicals (Baertlein) but according to the American supply chain, they view such allegations as baseless because they consider their products to be safe, free from chemicals and have a higher quality as compared to the local supply chains.
This made Yum Brands to apologize to its Chinese clientele over the health scare that hit the country and the ways and means they are handling such problems. The company also stated that it is experiencing huge losses in one of its largest consumer market (Baertlein).
As a result of the health scare, the sales of McDonald’s in china has gone down during their fourth quarter by about 1 percent with a projected decline in sales over the remaining fiscal year. This report was provided by the supply’s head of the company Don Thompson in a conference meeting with market analyst, who said that the supply chain is “committed to ensuring there is a high quality standard for the food safety throughout the world” (Baertlein).
In terms of revenue, McDonald’s is the largest restaurant chains in the world as compared to Yum Brands Inc. McDonalds as a company, is trying to invest tremendously in the Chinese market by setting up with rapid restaurants in the country (Baertlein). The company in general has a target of putting up more than two thousand restaurants in China before the end of the year (Baertlein).
Baertlein, Lisa. “China’s tainted chicken scare hit McDonald’s sales”. Reuters. January 23, 2013. < HYPERLINK “http://www.reuters.com/article/2013/01/23/us-mcdonalds-results-china-idUSBRE90M18N20130123” http://www.reuters.com/article/2013/01/23/us-mcdonalds-results-china-idUSBRE90M18N20130123>. Accessed March 05, 2013.