Managerial Economics Term Paper

Now the industry is worth $US60 billion and the farmers get about $US5.5 billion.

Berkeley, California, for example, has even considered banning the sale of coffee that is not 'fair trade'.

The chief executive officer (CEO) of your company, a large multinational coffee roaster and retailer, has been advised by the board of directors that shareholders are becoming increasingly concerned about the poor public image of the company as a result of consumer complaints about exploitation of coffee farmers in LDCs. She has read the Executive Summary of the World Bank discussion paper but remains confused.

To this end, she is seeking the counsel of staff within the organisation and has called for submissions in the form of discussion papers.

The remaining 20 per cent should focus on possible strategies that the firm might take to alleviate the concerns of the shareholders.

The CEO is aware that a brief as broad as this is likely to attract a variety of proposals, but this is quite deliberate on her part as she wants to encourage people to come up with some creative solutions to the problem.In December 2009, the business operated 32,478 restaurants in 117 nations, out of which franchisees of Mc Donald’s operated 26,216 and Mc Donald’s itself operated 6,262; until September 30, 2010, profit margin of the business was 20.65% and operating margin was 30.18% with a revenue of 23.83 billion, gross profit of 8.79 billion, and quarterly earnings growth of 10.10% (Yahoo Finance, 2010).The following figure illustrates the common stock price of the company from January 2006 to January 2010: The global fast food industry is composed of restaurants from different national and cultural backgrounds with abundantly diverse product types of distinct tastes, flavors, and origins.The number of firms in the industry indicates that the markets with huge numbers of firms would contribute further competitiveness rather than the market with little numbers of firms, thus Mc Donald face extra competitiveness in the US Fast food industry and enjoys more a major market share.The firms who are working in the US Fast Food Industry have a strong relatively among them that evidenced huge competitiveness within the industry.The coffee industry has been experiencing significant difficulties in recent times, prices tumbling to all-time lows in real terms during 2002 (see Figure 1).This has caused considerable hardship for coffee producers around the world, but at long last there appears to be good news.The purpose of this paper is to investigate a specific industry and select a representative company from that industry.To organize the paper, this report has selected global fast food industry considering the growth rate, customer base, and competition in the market.The paper will consider Mc Donald’s Corporation as a representative company of the industry.The global fast food industry instigated its journey at the inauguration of the industrial age; it obtained massive consumer attention along with the materialization of several big businesses in the industry.

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