The Consumer is King

According to Reuters, McDonalds is changing the way they do business.  Why?  To win back consumers.  McDonalds has had difficulty turning a profit the past few years, so they’re hoping new tactics can get consumers (and their money) back.

This is an important demonstration of one of the iron-clad laws of economics: the consumer is king.  In order for a transaction to take place, there must be two willing parties.  If one party doesn’t wish to partake, no transaction occurs.  This is the issue with McDonalds, and as such it needs to change.  The profit motive is extraordinarily powerful.

Also, notice something else: McDonalds is one of the largest companies in the world.  It had revenues of $27.4 billion last year.  And yet, it had no power to compel customers to purchase its items.  In fact, it has to reform to meet consumer demands, not the other way around.  This may come as a surprise to many folks who believe corporations have extraordinary power over the people.