COMPETITOR Report On CSR

SUBMITTED TO: Prof.MAYANK DHAUNDIYAL

SUBMITTED BY: Mohit Pruthi FT-12-MM-514

Introduction Summary of McDonald From humble beginnings of only three restaurants in 1955, McDonalds has full-grown to be a powerful multinational corporation with over 31,000 restaurants in 119 countries. McDonalds employs over one.5 million individuals and serves over forty six million customers per day. McDonalds Corporation has long held the quantity one ranking within the fast food trade. Across industries, McDonalds restaurants rank within the top three American brands. Being a significant corporate force doesn't return without its drawbacks. By virtue of its leadership position, McDonalds is additionally the world fast food industrys biggest target. One issue in particularthat of skyrocketing fleshiness rates and health risks caused by diets high in fat and sugarhas been essential for McDonalds. The corporation took its first major hit on this issue within the extremely published McLibel suit in England within the middle 1990s. That court case happened as a result of protestors distributing pamphlets titled Whats Wrong with McDonalds: What they dont wish you to Know that included various criticisms that McDonalds charged were defamatory. Associate uncomplimentary documentary based on this case, entitled McLibel, was discharged in 2005-6). In 2001, Eric Schlosser published a scathing criticism of fast food in the New York Times bestseller book, fast food Nation: The Dark facet of the All-American Meal. McDonalds nutrition and health impacts continuing in 2002 once 2 American teenagers filed a lawsuit against McDonalds claiming that the corporation was five to blame for their weight problems. however perhaps the foremost published and widely distributed charge of all came in 2004 once Morgan Spurlock discharged a movie directly geared toward McDonalds, Super Size Pine Tree State, a documentary presenting one mans journe y into the world of weight gain, health problems, and fast food. Although the fast food giant has since managed to recoup system-wide revenue gains and incremental will increase in per share stock costs from 2003 to 2005, these gains was modest. In 2005, whereas McDonalds Corporation remained darling within the fast food market, it dropped to number twenty nine in growth. PR Week reported that the explosive growth of the golden arches was checked during this decade as fast food chains became identified as prime culprits in fuelling the fleshiness epidemic among kids. Books like Eric Schlossers fast food Nation and films like Morgan Spurlocks Super Size Pine Tree State have served to popularize [sic]

McDonalds bashing.Public charges of wittingly pro viding fare that's doubtless dangerous to the health and well-being of shoppers has had a prejudicial effect on McDonalds corporate name and image additionally as stunt flying its growth. This case study provides the chance to assess the critical corporate communications function of issue management for McDonalds. a lot of specifically, the case explores the companys strategic communication responses to over fifteen years of criticism from mainstream and marginal advocacy and activist teams for promoting fleshiness and health problems among the people at massive. In 2004, some much-needed good business news came for McDonalds and alternative fast food corporations once a legislature ruling illegal lawsuits by obese customers alleging that fast food restaurants are to blame for their conditions. This ruling restricted lawsuits that would have doubtless resulted in insolvency across the fast food trade. The bill passed 276 to 139, and a comment by the bills author, Rep. Rick writer, R-Florida echoed McDonalds read that customers ought to embrace the principle of personal responsibility for their uptake decisions. not like Congress, the court of opinion wasn't ready to offer McDonalds a possibility and a lot of bad news came within the form of Morgan Spurlocks documentary Super Size Pine Tree State. just as media coverage of the 2002 lawsuits supply the fleshiness debate had run its course, and McDonalds had launched its commit to Win business initiative, Super Size Pine Tree State hit major theatres in 2004 with a scathing, direct attack on McDonalds regarding the difficulty of health and nutrition. The flick attracted each audiences and significant acclaim, winning honors at the Sundance festival associated an accolade nomination. alternative lobbyist and advocacy teams joined Super Size Pine Tree State director Morgan Spurlock in pushing the message that McDonalds food was bad for everybody. Corporate Social Responsibility While McDonalds name has taken a beating within the health and nutritio n arena, it has a stellar record for good corporate citizenship in alternative arenas. From the first Ronald McDonald House within the Seventies, McDonalds has designed up a formidable social responsibility program. additionally to the Ronald McDonald homes and a number of other Ronald McDonald children's charities, McDonalds sponsors a variety of educational and sports programs. In 2000,

McDonalds hierarchal darling for social responsibility in Fortunes listing of Americas Most loved corporations. In 2004, Fortune hierarchal McDonalds number five within the same category. McDonalds was named by Fortune jointly of the top 50 places for minorities to figure in 2003 and 2004. There are currently over 259 Ronald McDonald homes in communities around the world and therefore the Ronald McDonald Care Mobile program offers medical, dental and education services to necessitous kids in their own neighborhoods. The question of whether or not corporate social responsibility initiatives are enough to counter negative perceptions of McDonalds is very important one; most pundits are ready to supply a resounding No. Stephen Doherty, the chief operating officer of international PR firm Cohn & Wolfe, said, I've never seen a name hunter for food corporations that didn't have McDonald's ranking near, or at, the bottom. Climb out of a hole that deep and longstanding requires a Herculean effort. the basic challenge lies within the 15demonisation of its core product over the past five years. Youll be able to spend millions on CSR [corporate social responsibility] and community work; however that counts for little if burgers and fries remain 'evil' within the eyes of the public. The Issue of fast food, Nutrition, and Health The fast food sector has been right up there with the oil industry and tobacco corporations as a target for negative press. In 2003, Fortune magazine even ran a canopy story asking, Is fat following tobacco? Issues about the organic process content of fast food have raised mutually with rising fleshiness rates. The executive outline of the Calories Count: Report of the unit on Obesity summarizes the problem: Since the late 1980s, adult fleshiness has steady and well magnified within the us. Today, sixty four percent of all Americans are overweight and over thirty percent are obese; in 1988 through 1992, fewer than fifty six percent were overweight and fewer than 23 percent of yank adults were obese. The trends for kids are even a lot of worrisome. Recent research by the U.S. Centers for disease control and hindrance (CDC) shows that fifteen percent of kids and adolescents aged six to 19 are overweight--double the rate of twenty years alone. As Americans get heavier, their health suffers. Overweight and fleshiness increase the risk for coronary heart disease; type two polygenic disease, and sure cancers. In step with some estimates, a minimum of 400,000 deaths each year could also be attributed to fleshiness. While there is no single cause for fleshiness, or single resolution to cut back its incidence in America, the FDAs unit on fleshiness suggests voluntary organic process labeling at the point of sale for

building foods in order that shoppers will accurately assess the quantity of calories and fat content. They conjointly advocate that restaurant s replace saturated, or trans fats used in preparation oils with zero/mono and/or unsaturated fats, which do not raise bad sterol (low density lipoprotein, LDL) and even have health advantages once consumed carefully. fast food chains have long been targeted as providing junk food high in calories and trans fats, which thereby contribute to the growing drawback of fleshiness and health 16problems like high sterol, diabetes, and heart disease. The pervasiveness of the perception linking fast food to unhealthy diets is illustrated in a droll temporary from AARP: The Magazine naming the Riskiest Places on Earth.On their list is fast food drive-through, however providing you orders food. The suggested calorie intake for an average female is approximately 1400-1700 calories per day with two hundredth of calories from fat (no over 30-40 grams). For an average male, it's 1800-2200 calories per day with constant two hundredth from fat (no over 40-50 grams).McDonalds hotcakes with syrup and butter give 700 calories, 33 grams of fat, and forty five grams of sugar. The chocolate triple shake has one, 160 calories and twenty seven grams of fat, over half the suggested daily amount for a girl. The large Mac serves up 560 calories and thirty grams of fat. an oversized order of Irish potato contains 570 calories and thirty grams of fat. The typical American gets approximately forty fifth of his or her calories from fat, Olympian commonplace health recommendations by 25th.Trans fats in preparation oils, like those utilized by McDonalds are considered artery-clogging and are coupled to heart disease. They significantly raise the extent of bad sterol. The Miami Herald reported that trans fats are the new boogeyman of the table, a fat so insidiously unhealthy that one Harvard someone calls it 'metabolic poison. research has shown that trans fats contribute to thirty,000 U.S. deaths annually. The difficulty of diets high in fat and sugar is coupled to fast food partially because of quick foods quality with Americans, notably adolescents. One in four kids and four-hundredth of teenagers eat fast food daily. it has conjointly been shown that ninetieth of kids wear away McDonalds a minimum of only once each month. What is more, kids see $3 billion of fast food advertising in a single year. Super Size Pine Tree State The film Super Size Pine Tree State documents the experiences of journalist and director, Morgan Spurlock, as he makes daily commitment to uptake solely McDonalds food. Spurlocks objective was to explore the issues of corporate responsibility, organic process education, and

how we as a nation are uptake ourselves to death.Making no pretense of sound judgments, Spurlock come into being to prove that uptake at McDonalds is a health hazard. A doctor supervised his health and weight changes throughout the expertise. He gained 25 pounds and suffered a variety of health problems. Spurlock uses the documentary to criticize McDonalds selling to kids. In the film, Spurlock conjointly requires McDonalds to provide quick access to organic process info and to cancel the super size choice. Super Size Pine Tree State was discharged on might seven, 2004 to essential acclaim and box-office success. additionally, 2 changed versions of the film incorporating educational lessons for middle and high school students were conjointly made out there. The Super Size Pine Tree State computer parodies McDonalds in every means with colors that mimic McDonalds ancient red and yellow (See Appendix 4). It features a game the thing of which is for players try eating as many burgers as they will. Ancient flick ratings are replaced with new classes including F for Fat Audiences and therefore the tagline Some food might not be appropriate for kids. McDonalds Challenge The main question facing McDonalds is whether or not they'll continue their world dominance within the fast food trade by promoting active, healthy lifestyles once their core business comprises product that continue to be coupled to fleshiness and connected health problems. McDonalds has done a laudable job in selling the conception of client selection and in establishing a generous corporate social responsibility program. However, in the U.S. at least, McDonalds has not reduced advertising to kids, reformulated its trans fat oil, or lowered fat, salt, and/or calorie counts on its core product. rather than diminishing, the difficulty of health and nutrition continues to grow and McDonalds remains a key target in 2006. Ethics and Social Responsibility Social responsibility is a delicate surface to step into, considering the organizational objectives of profit maximization and share holder price maximization. As Monks and cyprinid (2001) ask of social responsibility, Is it socially responsible to move jo bs out of depressed areas? Is it socially responsible to stay in these areas if it suggests that going bankrupt?Some of the values represented by McDonalds scan like a book of virtues to reinforce customer expertise, showing relentless commitment to individuals, operating ethically in business with values of

fairness, honesty and integrity and giving it back to communities that support the company are some of the facets of McDonalds values and principles that they claim to embrace. And it's not just in their property report or corporate responsibility statement that the company shows its commitment towards giving it back to the community that it belongs to. the muse for corporate Social Responsibility (2004) vouches for McDonalds commitment towards soc ial responsibility, once it affirms that the companys principle of giving back to the communities . . . still holds at McDonalds today. The report goes on to state that the company and its franchise operations support native faculties, the young and therefore the old within the form of athletic teams to communities of senior citizens, promote safety awareness, conduct literacy programmers and environmental projects and take up initiatives towards fund raising within the native communities for noble causes. The property programmer of McDonalds is seen to have their firm concentrate on nutrition and wellbeing, usurping environmental responsibility, enhancing employee experiences, promoting a property supply chain and supporting the community in traditional additionally as in trying times through charities, sponsorships, direct involvement and in providing disaster relief, as claimed in their property report. Conclusion It is clear from the discussion that McDonalds has been focusing on a cost -leadership strategy to win market share in a extremely competitive trade, and has reached its dominating position within the market exploitation the strengths of the franchise model of distribution. McDonalds has exploited its strengths in standardization of operations, sales and selling, supply chain management and whole building initiatives. The community initiatives and display of corporate social responsibility maintain to strengthen the whole image, involving native communities into the company whole and reaching out to a wider market. However, there is room for improvement once it comes to service standards, customization to suit native cultural values, addressing health problems associated with its diet and focusing a lot of on customer satisfaction, than having a pure and unrelenting concentrate on business turnover and cost leadership alone. This could help in sustaining the market leadership in a volatile market situation with high levels of group action inside the trade players, wherever customers don't have any switching costs in terms of choosing alternative brands or substitute product, associated in an trade that has minimal entry and exit barriers and thence has high threat of substitutes and new entrants.

Summary of Jaipur Rugs The Jaipur Rugs case explores however an organization will profit the poor by connecting them with world markets. Jaipur Rugs makes this association by building and orchestrating a global supply chain on a huge scaleone focused on developing human capability and skills at the grassroots level, providing steady incomes for rural men and girls within the most depressed parts of Republic of India and connecting them with markets of the rich, like the us. Thousands of independent workers are organized to produce systematically a awfully top quality product, on a fancy localized basis through a system of organization that's distinctive. The company not solely uses ancient weavers however conjointly teaches, in remarkably short time, the craft to those that do not have a practice of weaving. Raw materials are sourced from around the world, processed into rugs with ancient and new designs in rural Republic of India whereas maintaining internal control of finish product. Jaipur Rugs provides a novel and dynamic example of however a profitable business association between the poor and therefore the richacross the worldcan be done. The system of JAIPUR RUGS The Jaipur Rugs operation is split into four completely different entities: Jaipur Rugs Company, Jaipur Rugs Incorporated, Bhoomika Wools, and Jaipur Rugs Foundation. All entities are held accountable by a member of Chaudharys immediate family. The coordination of activities across multiple legal entities offers Jaipur Rugs: A. Access, however not possession, to specific skills B. Influence, however not control, over key processes C. Decentralization of investment. Jaipur Rugs Company (JRC): JRC handles all the operations from stuff procure to final sale for every market except the us. JRC is go past N.K. Chaudhary (CEO) and his eldest son, Yogesh (Director). Additionally to the JRC headquarters in Jaipur and a panoptic on for final product in International Home Deco Park (IHDP) in metropolis, there are twenty two branch offices throughout northern and western Republic of India.

Jaipur Rugs, Incorporated (JRI): JRI, headquartered in Atlanta, Georgia, handles distribution, selling and sales for the us. JRI is go past Chaudhary's 2 eldest daughters chief operating officer Asha Chaudhary, and COO Archana Chaudhary. As of July, 2008, the company used seventeen individuals, principally in sales positions. Bhoomika Wools: Bhoomika Wools facilitates the wool acquisition method solely for Jaipur Rugs. Bhoomika Wools is go past Chaudhary's in-law, Navratan Saraf. Jaipur Rugs Foundation (JRF): Jaipur Rugs Foundation is a non-profit organization established in 2004 to encourage grassroots mobilization of weavers and to boost the welfare of the companys weavers and their families. In 2008, the muse was go past Chaudhary, with five workers based mostly within the Jaipur Rugs headquarters and twelve field workers working with the communities wherever Jaipur Rugs has operations. BUSINESS SYSTEM BUILDING BLOCKS Four foundational building blocks allow Jaipur Rugs to productively influence quality and rapidly suits marketplace demands, whereas executing the extraordinarily complex method of returning raw materials to associate autonomous cluster of individual contractors. I. Deeply rooted Relationships Chaudhary designed Jaipur Rugs by accentuation family ties and robust personal loyalties. This foundation allows Jaipur Rugs to with efficiency operate a extremely localized manufacturing and supply system. Besides the five Chaudhary kids that head completely different areas of the company, many of {the area the world the realm} commanders and entrepreneurs who own the companies that are key parts of the assembly processes got their start as weavers for Chaudhary. By treating his workers fairly, Chaudhary creates a sense of loyalty, which, combined with investments in supply and internal control systems, and even personalized training in some cases, positively affects the standard of all the key production processes which are outsourced to virtual workers. II. Driven by Social Values The companys social values are mirrored in its commitment to provide the following:

A. Competitive wages. Wages paid by the company give individuals options to have an improved quality of life than the alternative work out there in villages. B. Investment in skills training. The most activities of the Jaipur Rugs Foundation are to recruit and train new weavers for the company. Because of the social impact that Jaipur Rugs has on many regions of the country, the government subsidizes the price of looms and training in sure regions. C. Access to care and education. The Jaipur Rugs Foundation leverages alliances with alternative NGOs that give health care and education to the weavers. D. Opportunities for aspiring entrepreneurs. Once he acknowledges contractors who aid work and have the proper attitude, Chaudhary believes in giving them loans in order that they'll become key links within the overall production method. As a result of his recognition of their talents, many contractors see their incomes, social standing, and capabilities multiply. as a result of Jaipur Rugs demonstrates robust social values, its contractors acknowledge the difference in working for Jaipur Rugs versus alternative corporations. This recognition elevates the connection between contractors and therefore the company from a contractual agreement to at least one of many-sided price for each. These robust relationships help Jaipur Rugs influence the standard of its product, despite utilizing such a extremely localized production method. III. Reducing Capital Intensity Jaipur Rugs advantages from a business model focused on changing mounted costs into variable costs, which allows them important flexibility. A. Work is decentralized: carpeting production is done on a pay for performance basis, looking on the standard and therefore the amount made. As a result, the companys largest costs labor and stuff are variable. B. Investment is decentralized: By exploitation contractors for its manufacturing operations, Jaipur Rugs reduces its capital needs by not owning the key manufacturing assets, like the dying, washing, machine carding, machine spinning operations, and most weaving looms.

C. Management influence over key functions is extremely leveraged: the company directly employs solely three hundred individuals, nevertheless influences forty,000 artisans who act as entrepreneurs and contractors. IV. Technical design The companys technical design combines info technology (IT) infrastructure, human interaction, loyalty, and training. Jaipur Rugs investment in IT infrastructure includes associate Enterprise Resource coming up with (ERP) system to optimize its geographically various supply chain, allow the continuity of labor, institutionalize internal control and reach scale. the company conjointly focuses on creating well-designed communications networks to deliver raw materials, communicate with weavers, and track the progress of labor in remote villages with no electricity. These communications networks are utilized by the companys branch office to effectively manage a extremely human capital intensive method. One in every of the companys most fascinating processes is the design and creation of the build sheets, known as maps. The maps give the weavers, who usually have minimal education, easily comprehendible directions on wherever to place every strand of different colored yarn. Because of the means the maps are designed, a weaver primarily needs no training to produce a new design on a given loom. This flexibility in Jaipur Rugs business model suggests that the company will image new designs very cheaply, which it 28,000 weavers will respond fairly quickly to ever-changing customer preferences and business needs.