International business

Topic -

McDonald’s

Prepared by –

Mohit makhija

Roll no. 29McDonalds In the context of international business

McDonald’s is a Multinational Company who have expanded dramatically. They are a company whose policy is based on globalisation, by the fact that Macdonald’s and its franchises growth is remarkable they have over 21000 restaurants in over 101 countries, and territories in all parts of the world including Argentina, Cuba, Singapore India.

McDonalds have achieved their recognition and status by being successful, with success comes a reputation for professionalism.

The recognition of the barriers they faced with cultural differences was a major task McDonalds took on. This is a process of adjusting and adapting to a specific culture other than one’s own culture.  International business will act as a change agent by introducing new products, ideas or practices, e.g. for example in a 10 year period the international portion of McDonalds sales grew from 13 - 23 %.   In markets like Taiwan, the entry of McDonalds and other food dramatically changed eating habits of the younger.

McDonald’s knew that in certain countries they had to adapt to the cultures and overcome the barriers that were put in front of them.   McDonalds   realised that they had to take into consideration local tastes and concerns when designing their buildings.

Strategy of McDonalds.

1. Localisation has been a consistent McDonald's strategy especially in countries with strong cultures. India is a story similar to France, where the focus is constantly on developing a menu that suits the local palate. Service orientation and layout also take into account local sensibilities. They have experienced early on India as well that just rocking a slice of America will not take them through.

2. Adapting in the local market has always been the strategy that worked for MC DONALD'S which made it the number one fast food chain in every country. Nevertheless, this is a very nice article on the power of franchising as a marketing tool in expanding the brand in the global arena. One major factor for MC DONALD'S success is the fact that there is a franchisee who knows the local market

3. Nothing surprising in terms of local strategy. You can only win in France by acting French. That's what McD is doing. What is surprising is McD's willingness to abandon American standards in favour of local ones.

4. But may require a more detailed analysis and investigation! Burger King failed because of a deep disconnect between BK franchisees and BK USA!

CONCLUSION

In this article, I have examined the international expansion process followed by one of the most visible American firms to expand abroad and also a firm that has pioneered American

Fast-food and franchising in several countries. I found that this firm’s pattern of entry into foreign markets and growth easily rejects the notion that McDonald’s expanded abroad because it had saturated its home market. Instead, consistent with traditional profit maximization arguments for a firm with market power that faces numerous market opportunities and limited resources, we find evidence that it allocated resources to achieve growth across many highly desirable markets. Specifically, it enters those markets with the most promising demographics first. Finally, I have found that while growth conditional on entry, and entry itself, share some common features, e.g. they are both positively related to a country’s market potential, there are also a number of factors that affect entry and expansion differently. I conclude that it is Worthwhile considering more generally how service chains expand abroad and going beyond just entry to gain further insights in the process and hurdles involved in foreign expansion.