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McDonald・s China: The Expired Meat Scandal  
 
Product Ref: 14/550C Company: McDonald's

Product Type: Case Industry: Fast-Food Restaurant

Related Product(s): Teaching Note
In July 2014, a Shanghai television station revealed that Shanghai Husi, a Chinese subsidiary of a reputable US-owned food supplier, was producing substandard meat products. McDonald・s was one of its biggest fast food clients and had been sourcing from the supplier for more than two decades. After cutting ties with Shanghai Husi, McDonald・s China and its branches in Hong Kong and Japan were forced to pull a number of products from their menus due to a severe shortage of meat and vegetable supplies. The impact of the scandal was clearly reflected in the poor performance of its sales and stock. The food scare dissipated the general belief that food produced by foreign brands was better than that from Chinese counterparts. With large foreign-owned suppliers in China no longer guaranteeing reliability, what could McDonald・s China do to strengthen its supply-chain management? What lessons should it learn from the incident? Would it be better for McDonald・s China to run its own food processing plants in China?
Functional Area : Marketing
Production & Operations Management
Strategy & General Management

Learning Objective: To identify challenges in maintaining sustainable supply chain; To explore ways to enhance supply chain management; To assess the feasibility of vertical integration, outsourcing and other sourcing options
Length: 16 pages Country: China (People's Rep. of)

Pub. Year: 2015 Level of Difficulty: 2
         
This product type is available in the following language(s):      English
         
Related Information: N/A
 
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