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Wednesday, March 28, 2012

Strategic CSR - McDonald's

How would you classify the story in the article in the url below? The article reports McDonald’s recent announcement that it will continue its sponsorship of the Olympic Games through 2020:

… a deal estimated at about $100 million per four years, or for every pair (winter and summer) of Olympic Games.

Some see this story has the height of hypocrisy:

Many critics are galled by the notion that a restaurant known for flipping fatty burgers and greasy fries is joined at the hip with one of the foremost showcases of athleticism and fitness. Numerous protests are planned for the 2012 Games.

Others see this as a successful attempt to influence incrementally the largest, most successful global fast-food company. In other words, McDonald’s is successful and will continue to serve a lot of customers. As such, if the firm can be persuaded to make its food more healthy, then a great deal of social value is added. McDonald’s (on the surface, at least) gets this:

In a statement, McDonald's president and COO Don Thompson said, ‘In keeping with McDonald's ongoing commitment to children's well-being, we will continue to communicate with kids about the importance of balanced eating and active lifestyles through our partnership with the Games.’

For London in 2012, McDonald’s is facing criticism beyond the quality of its food:

McDonald's position as the exclusive ‘meal brand’ of the games has drawn much ire across Britain for putting an American face on the food [promoted at the Olympics]. Other chains must remove their labels and/or change packaging on food sold throughout several Olympic sites, according to The Guardian, meaning the country's mix of British, Indian and other ethnic fare will go mostly unnoticed.

As much as I would like to think the author is correct, I cannot agree with the conclusion they draw regarding the value of this sponsorship for the McDonald’s brand:

Branding is a slippery thing for a company. After all, it's hard to tell if there's a direct benefit from any advertising -- on TV, for an event, or in a magazine. But one thing is clear: It's all about the brand, and if McDonald's is bringing bad press upon itself with this sponsorship, it will be a double whammy for the company. Not only is it wasting ad dollars, it is tarnishing its reputation needlessly.

Clearly, the Olympics is a valuable branding event for any firm associated it with it (whether that association makes any logical sense, or not).

Take care

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McDonald's takes heat for Olympics sponsorship
Not exactly a beacon of healthful living, the fast-food giant is criticized for linking its name to athletic contests.
By Kyle Woodley
InvestorPlace (MSN.Money)
January 13, 2012