Introduction

Although the Covid 19 pandemic has significantly subsided in most countries worldwide, compared to 2020 and 2021, its implications, especially in the business environment, are still prevalent. The pandemic had a significant implication on various business processes, including manufacturing, sales and marketing, supply chain, and others. However, the supply chain business aspect can be asserted to have been impacted more intensely by the pandemic, especially for multinational corporations.

Mcdonald’s is among the most established global fast-food chains, with multiple subsidiaries and outlets in multiple global locations. The business positions itself with having similar menus or offering uniform products in a significant majority of global markets. The business encountered profound and unpredictable changes in the supply chain and other operations during the pandemic. This challenge can be attributed to increased market volatility, as the pandemic generated unexpected changes for the business, which would last for an unpredictable amount of time (Murugan et al., 2020). The pandemic saw most countries institute lockdowns and shutdowns, which halted various supply chain activities. The business sources various supplies in the international market, implying that the instituted lockdowns led to input shortages, which affected business productivity. Since the challenge was mainly regulatory, the business should have operated in a highly volatile business environment. This challenge can be asserted to occur due to natural disasters and regulatory changes. The business ought to integrate various changes to avoid future business disruption. Maintaining a significant inventory level to avoid input shortages during natural disasters is a powerful solution that ought to prevent such occurrences in the future. However, the solution is also bound to various challenges, including uncertainty, in periods of low demand.

Mcdonald’s also operates in a highly uncertain business environment. The restaurant industry can be asserted to be highly dynamic and competitive, given the integration of various disruptive technologies that change the nature of operations and the existence of multiple market rivals offering similar or substitutable products. Although Mcdonald’s is ranked as the top fast-food restaurant globally, it competes intensely against other fast foods such as Wendy’s, KFC, Starbucks, and others, which have also gained a significant market in multiple global markets. The business competes against other small and medium-sized enterprises offering the same products. While the competitive rivalry in the industry is significantly high, the threat to new entrants, the bargaining power of customers, and the threat of new substitution are also high, which intensifies market uncertainty (Popova et al., 2018). Competitors’ strategies in the future may have significant implications for the business. To solve this challenge, the business should collect, store, analyze, and interpret industrial data to determine its current position in the industry and various marketing and competitive strategies to maintain its competitive advantage. This solution can be affected by the ambiguity aspect of the VUCA model. Despite collecting essential industrial data, unclear causal relationships between variables may hinder effective decision-making.

The business operates globally, attributed to different economic structures, political drivers, regulatory stipulations, and social factors. These factors increase complexity by generating significant economic, social, political, and regulatory risks. For example, Mcdonald’s positions itself with the provision of uniform menus worldwide. The business has various beef products on the menu, such as beef burgers. However, cattle have a religious meaning in the Middle East, especially India, an aspect that increases complexity.

Further, different countries have instituted laws and regulations such as labor laws, consumer protection, human rights, tariffs, import restrictions, and others that tend to increase the complexity of operating in the global market. Political tensions and economic changes in the global domain also change demand patterns, hence affecting business sustainability. As a solution, the business should develop specialist policies to address various economic, regulatory, and social changes and differences in the global market (Worley & Jules, 2020). However, this solution should be affected by the volatility aspect of the VUCA model, as such external environment factors may generate unexpected business changes.

McDonald’s also targets expanding to new emerging markets, especially in Africa, where the business has a limited presence. The business also targets differentiating its products by including healthier food options in its menu. Although this can be a good opportunity for business growth, these decisions ought to be affected by increased market ambiguity, as these decisions are outside the major Mcdonald’s competencies. To understand new geographical and product markets, the business should conduct a pilot test or experiment with sustainability in these markets. However, this decision is affected by the uncertainty aspect of the VUCA model, as important market information may be unavailable, especially in the short run.

Conclusion

Businesses operate in a highly volatile, uncertain, complex, and ambiguous environment. Such an environment tends to generate significant challenges for the business while also affecting solutions, evident from McDonald’s business scenario. As a solution, businesses should integrate effective leadership approaches; to increase business resilience and adaptability, leaders should also be visionary, understanding, courageous, and adaptable to enhance business sustainability.

References

https://www.forbes.com/sites/hbsworkingknowledge/2017/02/17/vuca-2-0-a-strategy-for-steady-leadership-in-an-unsteady-world/?sh=4da6967b13d8

https://www.themarginalian.org/2014/01/29/carol-dweck-mindset​‌‍‌‌‍‌‍‍‌‌‌‍‌‍‍‌‍‍‍​/

Murugan, S., Rajavel, S., Aggarwal, A. K., & Singh, A. (2020). Volatility, uncertainty, complexity and ambiguity (VUCA) in context of the COVID-19 pandemic: Challenges and way forward. International Journal of Health Systems and Implementation Research, 4(2), 10-16.

Popova, N., Shynkarenko, V., Kryvoruchko, O., & Zéman, Z. (2018). Enterprise management in VUCA conditions. Economic annals-XXI, (170), 27-31.

Worley, C. G., & Jules, C. (2020). COVID-19’s uncomfortable revelations about agile and sustainable organizations in a VUCA world. The Journal of Applied Behavioral Science, 56(3), 279-283.