McDonald's: not just burgers and fries anymore
Everyone is familiar with the Golden Arches. Everyone knows exactly what they stand for. McDonald’s, the largest fast-food chain in the world, is known for fast food that is inexpensively priced. Well, over the past few years, purveyors of McDonald’s food have begun to witness a change. McDonald’s suffered its first-ever quarterly loss in 2003, the first quarterly loss since the company went public in 1965. Now, McDonald’s is beginning to target a new audience with new healthier food choices. You can purchase a California Cobb salad for $4.50 or a grilled chicken club sandwich for $3.89. With an increase in price, you might think that there would be a decrease in demand and overall consumption of McDonald’s food. However, we have seen just the opposite. McDonald’s saw the average check total increase by 5% to about $5. The company’s annual revenue has grown from $17.1 billion in 2003, to $20.5 billion in 2005. So why is McDonald’s seeing such growth? There are many factors, one may be good timing. More Americans are becoming increasingly health conscience and thus are looking for healthier food choices. The salads, along with white-meat chicken at McDonald’s seem to provide that healthier alternative to a Big Mac and fries. So even though competitor prices or substitutes, such as Wendy’s or Burger King remain low, McDonald’s is still raking in the profits.
1 comment:
In my opinion, to respond this phenomenon, we need to refer opportunity cost. Nowadays, most of the people eat food are no longer just in order to fill their stomach and satisfy their mouths, but with enough money in hand, value very much about whether the food they eat is good to their healthy. For example, rather than original fries which could raise the possibility of illness like cancer and fatness that happened in future, now, more people prefer healthy food like new salad. Because in this way people think that they could make their lives longer. Although when they order the food, most of the people did not notice, they in deed indirectly choose a way on which they could avoid the opportunity cost - the money that they will spend on treating illness and the probably a lifetime lost in future.
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