McDonald’s Woes vs. Corporate Power Narrative

business_ethics_highlights_2The continuing bad news for the world’s largest fast food chain is hard to square with the popular idea that large corporations control their markets and form consumers’ preferences. John Kenneth Galbraith’s corporate power narrative, advanced in books like his 1967 New Industrial State, effectively denies the possibility that established corporate titans can be undermined by upstarts. However, the last four decades have been more a tale of Schumpeterian creative destruction than of increasing entrenchment among established players—in the fast food industry and (almost) everywhere else. >>>

LINK: Things just got a lot worse over at McDonald’s (by Karma Allen in CNBC)

“In particular, customers seem to perceive the traditional burger chains as increasingly tired brands—industry competition is fierce, and shifting consumer preferences for healthier foods is taking a toll,” the report said.

The decline comes as more consumers move toward younger fast-casual burger chains, including Five Guys, In-N-Out Burger and Shake Shack (SHAK), which typically offers better ingredients, freshness and more developed decor, according to the report.

The report is the latest of a slew of bad news for McDonald’s, which posted six straight quarters of decreasing U.S. sales.

What do you think?

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  1. Abe

    Are we offering lessons in preaching-to-the-choir style oversimplifications and how to set up strawman arguments? If so, well done.

  2. The Editors

    Abe, is the supposed strawman the claim about what Galbraith says? If so, feel free to offer a correction.

  3. Abe

    I’m indifferent to a close reading of Galbraith. It’s using Galbraith as stand-in for the view that large corporations form consumers’ preferences. Perhaps I was too quick, though. It might be a demonstration of a false dichotomy also.

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