why did mcdonald's expand internationally

It was also the date of the foundation of the McDonald's Corporation, beginning the global march of the company. Actress Sharon Stone and fellow celebrities Jay Leno, Shania Twain, Rachel McAdams and Pink have all been on the payroll. All these factors contribute to the high revenues and with advanced software systems; the aim is to enhance “bottom line” as well ((McDonald’s Fact File 2007, 2007). In times of great uncertainty, our Franchisees work with a business model that has successfully been delivering year-on … Inspite of an American base, McDonalds respects the markets, cultures, beliefs and likings of other nations. Today, on average, McDonald's opens a new restaurant every three hours. McDonald's Corporation (NYSE: MCD) is the world's largest chain of fast food restaurants, serving around 68 million customers daily in 119 countries. With operations in over 120 countries and a huge number of 31,000 restaurants, McDonalds procures its food and packaging from the same set of suppliers. All work is written to order. 1. But to fulfill the ever changing customer demands and customization strategies in every country, the structure needs to be a combination of centralized and decentralized forms. Marketing: The McDonalds logo is a popular one amongst children and adults all across the globe. Some of the other ways the approach in China was different as compared to the United States was that McDonalds customized the menu by adding teriyaki burger which gave locals the flavour of their native food taste (McDonald’s Fact File 2007, 2007). The base of the approach is to provide comfort to the customers in shopping malls, towns and other areas. Four years later, the company heralded the expansion into its 100th nation, Belarus, and claimed to be opening a new restaurant somewhere in the world every three hours. First, you spread the risk of slowing demand across multiple countries. 5. The truth is, when building out international operations it’s a delicate balance of timing and understanding the cultural nuances. • The first McDonald's restaurant in the UK opened in 1974 in Woolwich, south-east London. By 1955 the McDonalds had built up a successful but modest chain of eight restaurants featuring a simple self-service menu which allowed speedy service. The brothers, still wary of over-expansion, agreed to sell the business to Kroc for $2.7million - a neat $1million each after tax. He was an aggressive businessman with a good grasp of the importance of marketing and advertising. They have successfully implemented international strategies where in they have used localization and customization processes to adapt to the foreign countries along with maintaining its American origin by having centralized procedures as well. Company Registration No: 4964706. Today there are branches of the fast food chain in 119 countries selling 75 burgers every second. The internal analysis of the firm are carried out to understand its strengths and weaknesses either which are existing or are potentially going to exist in the future as compared to its competitors (Deresky, 2006). Local people manage the operations in McDonalds in China, thereby reaching out in an easier way to the locals of the country. Meanwhile, the stock pays a 2.6% dividend yield, and could grow the dividend by at least 10% each year. Standardization strategy The first McDonald's franchise, right, in Illinois, and left, the iconic golden arches, Entrepreneur Ray Kroc extended the McDonald's empire, Not loving it: McDonald's customer left vomiting 'after being sold RAW Quarter Pounder', Young mum quits £450 McDonalds habit to shed five stone. Local people manage the operations in McDonalds in China, thereby reaching out in an easier way to the locals of the country. The prime reason behind the fast and successful international expansion of Mc Donald's is the franchise mode of entry in international markets which allows shareholders to share the rewards and risks of pursuing and exploring of new opportunities globally. Customization of products to suit local needs is a key factor that should be considered in the global expansion plan. 20th Jul 2017 Unwitting staff would often receive a phone call late at night telling them to make sure to clean up properly. Additionally, the management’s ability in Europe slowly changed the taste of the Asian consumers towards fast food which is an unusual aspect of the Chinese culture. In India, the menu is highly customized to suit the Indian tastes and this justifies the inclusion of aloo tikki and paneer burgers. Around 85% of the restaurants are operated by franchisees. He insisted every burger in every restaurant was of the same quality and that packaging was consistent. • It employs more than 1.7 million people at 35,000 branches, second only behind Walmart. McDonalds is the number one brand in the fast food industry. Franchisees Challenges: There is an increase in the fee that franchisees have to pay to McDonalds thus resulting in selling of the businesses and dissatisfied franchisees. 3. McDonald's is synonymous with fast-food in many parts of the world, but there is one country where it's failed to capture national attention. As described in the above sections, McDonalds has huge potential in global markets to venture out in different areas specially the BRIC countries. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. 2. Its Glo-cal strategy to serve the customers in a better way & enriching their experience with local menus is the smartest step that proved critical to McDonald’s … Furthermore, McDonalds is currently using the vertical integration approach to improve its productivity with efficient software packages. By reaching saturation levels in the United States, McDonalds looked to expand internationally amidst increasing regulations. This compliments the marketing efforts which are carried out through market analysis thereby giving positive returns to McDonalds. Customization of activities and menu to suit local needs is the single most factor contributing to its success. McDonald’s does business in more than 100 markets around the world. McDonalds is an example of a company which is centralized in its core but still customizes the menu and the operational activities for local needs. Joint ventures can be taken up with established companies in foreign countries with inclusions of coffee shops, bakery, internet access add-ons in all high profile metropolitan cities McDonalds currently have restaurants. The prime reason for the success of McDonalds in China is the involvement of McDonalds to adapt to Chinese Culture. This can cause difference in planned returns for McDonalds. The Big Mac becomes Maharaja Mac in India and another highlight of the menu is having separate vegetarian kitchens with separate utensils and cooks. • The £16billion annual revenue of McDonald's makes it the 90th largest economy in the world, outstripping many entire nations. Marketing Strategy of McDonald's has evolved itself from using a product-based positioning to using Value-based positioning strategy. It is one of the most widely recognized icons of the world in the fast food restaurant industry. 1984 - Kroc dies. The organizational structure is in sync with the strategy used by McDonalds to be ahead of its competitors. The company has high growth potential in the years ahead, thanks to aggressive international expansion. BURGER OUTLET THAT BECAME A GLOBAL PHENOMENON. It is challenging for managers to consistently keep in pace with the right balance of centralizing and decentralizing the operations. 2. Some of the programmes they have are the greener than ever programme; recycle, renew programme; animal welfare program to name a few. • It's estimated that one in every eight Americans has worked at McDonald's at some stage in their lives. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. 2. Going Global. Different marketing strategies are used to attract people from different sections of the society. order back issues and use the historic Daily Express With experience, localization started increasing and the entire model was redone to appeal the localites of the foreign country. In some countries it is still a status symbol to go and have a meal at McDonald's. McDonalds franchising process is that of a strategic network (Hitt, et.al 2007). However, the company was also responsible for driving up standards in the fast food industry. In terms of the way McDonalds organizational structure is oriented, it is relatively organized in terms of how the growth and expansion takes place internationally. 1. Looking for a flexible role? McDonald's reached its sixth (and, barring a sub-Arctic drive-thru, final) continent in 1992, with the opening of a restaurant in Casablanca, Morocco. One of the challenges that exist for McDonalds in Brazil is bankruptcy because of which it is difficult to meet the expenses on a monthly basis. McDonald’s, which makes up 0.64% of the iShares Core S&P 500 ETF (IVV), is planning to add 1,500 new units across China, Hong Kong, and Korea in the next five years. 1. Increased global competition, customer needs, potential opportunities, declining foreign trade barriers, increasing expenses in domestic markets are some of the reactive reasons for companies going global. The massive and aggressive expansion strategies that McDonald’s took up in India was with the sole objective of establishing its presence indelibly in the sub continent and to prove to the world that if … 5) Tailoring the right menu. 1. It also means the structure is relatively a mix of formal and informal forms which is quite a challenge to manage successfully. Additionally, the drive-through approach works well in the South African region. However Kroc, 53, persisted, securing a deal with a plan that involved him taking responsibility for setting up restaurants throughout most of the country while Maurice and Richard focused on California and Arizona. Additionally, the management’s ability in Europe slowly changed the taste of the Asian consumers towards fast food whi… Corporate Social Responsibility: McDonalds has programmes for having a better society. With over 90 branches in South Africa, employment opportunities are high for local people and are expected to rise. Adaptability: It is one of the major strengths of McDonalds. Kroc, who was born to parents of Czech origin, once quipped: "I was an overnight success all right but 30 years is a long, long night.". There are many reasons for companies to go global or expand overseas. There are a lot of emerging markets particularly in the BRIC countries such as Brazil, Russia, India and China. Yet it would have been an entirely different story had Ray Kroc not stopped off for a bite to eat at the first restaurant in San Bernardino, California, 60 years ago. The chain continued to expand domestically and internationally, extending to Canada in 1967, reaching a total of 10,000 restaurants by 1988, and operating more than 35,000 outlets in more than 100 countries in the early 21st century. … The status of franchising in the markets where we currently do business is described on the specific pages identified by market below. VAT Registration No: 842417633. This takes care of blending with the local culture and values of the foreign country. The golden arches of McDonald's are said to be the most recognisable symbol in the world. South Africa: A relatively unique strategy has been used by McDonalds to serve customers where they can enjoy their meal while shopping and playing. McDonald’s ensures the correct sizes before exporting for international target markets. 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