mcdonald's international strategy

Customers in different nations have … 118 Issue: 12, pp.2855-2872. Tackle impact of recession by offering good value item. McDonald's has addressed to the needs of the local population in big as well as emerging markets (Pradhan, 2018, p.n.d). The international strategy of McDonald’s is often referred to as the glocalization strategy. They needed to attune their brand to the needs and wants of the local customers in each of the markets … The glocalization strategy involves the integration of the global and local. For instance, in Australia, a majority of products include chicken as the main ingredient. However, it has planned to open vegetarian restaurants in India because of the preference of Indian customers for vegetable burgers. This strategy has allowed the brand to achieve success in the international market. Restaurants were more akin to coffee houses where people meet rather fast food joints. McDonald has adopted the international strategy to do global business. Of late, McDonald’s international openings have made headline news in the media around the world. They serve around 60 million customers per day. The value chain needs to be constructed taking into consideration of local culture, legal-political and economic environments in mind. Kim, Jungsun, Christodoulidou, Natasa, and Choo, Yunjeong 2013 "Factors influencing customer acceptance of kiosks at quick-service restaurants", Journal of Hospitality and Tourism Technology, Vol. Activists sued the company for exploiting children in advertisements, producing misleading advertisements, cruelty to animals and antipathetic to unionization. It is the best strategy which fits in the structure of McDonald international structure because McDonald doesn’t have a heavy cost reduction pressure or even high local responsive pressure. As a transnational company it is essential to have a standardized system and process in place for effective and efficient management of the businesses running in different territories. Big-Mac is one of the most famous burgers of McDonald’s that is made of beef. The leaders of McDonald’s believe that people are one of the most important resources. We're here to answer any questions you have about our services. The standardization strategy of McDonald’s that involves a bit of localization has proved to be successful in several markets. The cultural-distance theory has also highlighted the need for forming joint ventures in the global market (Crick and Crick, 2014, p.429). McDonald’s has adopted a Market Development strategy for expanding into growing economies, especially those of Asian countries. The strategy does require higher communication and production costs. The “Big Mac” introduced in 1968 was the brainchild of Jim Delligatti, one of the earliest McDonald’s Systems franchisees. To export a reference to this article please select a referencing stye below: If you are the original writer of this report and no longer wish to have your work published on the UKDiss.com website then please: Our academic writing and marking services can help you! The local market involves challenges because it is costly to adapt the menu according to the needs of every market (Wang and Somogyi, 2018, p.2868). While McDonald’s faces costs of expansion into new and within markets, it is able to assess the long-term prospects of different markets and it is on this basis that it would decide when to enter a new market. The report has discussed the internationalization strategy of McDonald’s and its success in different markets. Reference this. This is not an example of the work produced by our Essay Writing Service. McDonald’s is earning from two sources, one from home country US and another from foreign markets. Having local management also enables franchisee to address employees’ issues more effectively taking into consideration of local culture. They tried to replicate their US operations China without any modification to local population and their tastes. Kentucky Fried Chicken (KFC) is one of the most admired and known fast food chains in world. The company used photographs of the British farmers who supply McDonald’s, which appeared on the sheets of paper put on customers’ trays. The closest McDonald's is never far. However, one problem with McDonald’s penetration is that in some markets franchisees find themselves competing against each other. However, there are cases in which this strategy failed to provide productive results; such as in Germany and the Netherlands. Similarities: Companies of coke … Maximize our Marketing. Improved international profitability is realised as economies of scale are achieved in individual markets and as the company benefits from the global infrastructure. What McDonald’s looks for in its franchisees? Regional strategy became important for McDonald’s they started their expansion in Asian countries as their culture is very different from western world. The regulative institution is one that is related to regulations and laws. As per this theory, the international operations allow businesses to exploit opportunities present in the foreign land. McDonald’s was tarnished by the McLibel, which was the longest running libel trial in English history. The theory of internationalization that is applicable to the case of McDonald's is cultural distance. The third one is cognitive that is concerned with cultural aspects including symbols, signs, and gestures (Wang and Simonyi, 2018, p.2868). The international strategy of businesses requires adaptation to the local business environment. McDonald's aim to provide the best food not in the town but across the globe that can fill the aromas of its taste to its customers. KFC’s ownership change many hands, first it went to Hubelin International in 1974 and then acquired by R. J. Reynolds in 1982. The internationalization is referred to as the process of planning and developing products and services that can be adapted easily according to the needs and preferences of local cultures (Neale, Spark and Carter, 2018, p.171). The company managed to succeed in establishing their business where most Western based Multi-nationals have failed previously. Part of organisational culture is the quality of the food and service wherever the branch is located. The McDonald’s concept was introduced in San Bernardino, California by Dick and Mac McDonald of Manchester, New Hampshire. The glocalization strategy involves the integration of the global and local. Tags: Food and DrinkMcDonaldsManagementInternal AnalysisExternal Analysis. Therefore, McDonald’s has also adapted its menu according to the specific needs of a culture (Kim, Christodoulidou, and Choo, 2013, p.40). But it was only the beginning. It was because of the reasons that the customers in these regions demanded American menu (Jin and Li, 2017, p.817); The global convergence of customer tastes and preferences is the major reason that resulted in this change. The aim of this adaptation was to ensure that the preferences and needs of customers are met and satisfied. The ‘Think Global, Act Local’ perspective of the company is the key success factor. This initiative is an important part of the localization strategy of the business (Ziko et al., 2017, p.674). McDonald's locations are numbered at more than 38,000 in over 100 countries around the globe. Global Franchising McDonald’s does business in more than 100 markets around the world. This theory has discussed three types of institutions including cognitive, normative, and regulative (Bharucha, 2018, p.639). Therefore, it is important for businesses to consider the local culture before expanding into a location (Zhao et al., 2016, p.230). Franchising and licensing forms of new market entry is utilized within McDonald’s business strategy to a great extent. In the international business environment, McDonald’s was required to adapt to several situations including differences in religion, law, and customers (Jakhar and Srivastava, 2018, p.2166). The process of globalization has urged several international businesses to modify their strategy to adapt according to cultural differences. McDonald’s have made major strides in adapting to Chinese culture in terms menu and local taste. However, in other countries where the middle class is growing, it is considered to be a status symbol. On the other side, in the United States, beef is the main ingredient. To implement the localization strategy on a large scale, it is recommended that McDonald’s improve the flexibility of its menu. At the end of 1993, McDonald’s was Japan’s most successful restaurant chain, with some 1,400 restaurants enjoying nearly double the annual sales of its nearest competitor. Internationalisation Strategies of McDonald 1. The identification of cultural differences helps in the development of culturally appropriate strategies. The example includes McAlooo Tikki. The international segment overall attracted higher customer traffic to more than offset another slight decline in the U.S. Executives credited successful promotions, digital ordering and delivery, and the move to never-frozen beef for supporting the gains. 117 Issue: 8, pp.1998-2016. We're here to answer any questions you have about our services. The success of the international operations of McDonald’s reflects the successful internationalization strategy of McDonald’s (Continent and Ojala, 2012, p.496). McDonald’s force standard operating procedures like make to order make to stock and just-in-time processes. McDonald’s growth strategy is based on three elements, maximizing sales and profits at existing restaurants. In East Asia, McDonald's has targeted the younger generation that is the core market of the brand. This strategy has allowed McDonald’s to deal with bureaucracy present in a new market. McDonald’s adopted product localization and innovations for new offerings based on local tastes and needs. Company Registration No: 4964706. McDonald's aim to provide the best food not in the town but across the globe that can fill the aromas of its taste to its customers. One of the primary reasons for the failure can be attributed to the lack of appreciation of Chinese culture by other MNCs. Introduction: The term Strategy is always been defined as the ‘plan’ made by the top Management of the company to... 2. local customers and promotes ‘maximum local development’. 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