International Business Environment of McDonald : Report

Added on - 21 Jul 2020

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INTERNATIONALBUSINESS
Table of ContentsINTRODUCTION...........................................................................................................................1P1 Explain the international business environment in which a selected organisation operates..1P2 Describe the mechanisms that regulate international trade..............................................2P3 Describe how the environment and culture of another country affects a business operatinginternationally.........................................................................................................................4P4 Describe how the monetary environment affects businesses that operate internationally.5P5 Identify why businesses operate internationally...............................................................6P6 Explain the business strategies used by a business operating internationally...................6CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
INTRODUCTIONInternational business comprises all commercial transactions (private and governmental,sales, investments, logistics, and transportation) that take place between two or more regions,countries and nations beyond their political boundaries. Usually, private companies undertaketransactions for profit; governments undertake them for profit and for political reasons. The term"international business" refers to all those business activities which involve cross-bordertransactions of goods, services, and resources between two or more nations. Transactions ofeconomic resources include capital, skills, people etc. for the purpose of the internationalproduction of physical goods and services such as finance, banking, insurance, construction etc.P1 Explain the international business environment in which a selected organisation operates.An international business is a business that exchanges good with other businesses as wellas individuals in other countries; the goods that are exchanged include services and products aswell as transportation and investments.McDonald’s is a fast food restaurant franchise that is known globally and serves food tomany customers around the world. McDonald’s are a franchise; they are located in many places.They sell a variety of goods to customers; these include burgers, chicken products, soft drinks,milkshakes/frappé and types of deserts as well as breakfast items. McDonald’s was founded as ajoint business partnership between McDonald’s Corporation and two business; one of thebusiness men were American and the other British. The first McDonald’s restaurant in the UKwas opened in 1974. Currently operate 1,200 restaurants across Britain and they also serveworldwide and have 36,525 locations; they have 420,000 employees overall. McDonald’s havedifferent types of restaurants that sell the same products, these are known as a standardrestaurant which usually has a drive through service which also allows their customers to dinewithin the restaurant. Another type of McDonald’s restaurant is known as a ‘McDrive’ which iswhere they sell the products through a drive through window but do not offer seating within therestaurant or counter service; this restaurant is usually based along main roads and in servicestations along the motorway, they are also linked to petrol stations as part of the conveniencestore (Durepos and Villanueva, C. E., 2016).The final type of restaurant is known as a ‘McCafé’ restaurant, this is a cafe designedrestaurant which ¡s based in shopping centres and on small high streets; they don’t offer a drive1
through service but they do offer seating and over counter service. Although these restaurants reslightly different to each other, they still share the same aims and objectives; these are to be thebest of the best and to provide food of a high standard to customers. The competitors thatMcDonald’s have been KFC, Burger King and Subway; this is because they all offer fast food tocustomers which may potentially take their customers; in order for McDonald’s to stay at the topof the market they offer products at a slightly lower rate for example the saver ment which offersproducts for £1 to customers (Stahl and Zellmer-Bruhn, 2016). As well as this, McDonald’s alsooffer customers a discount if they have and retain the bus ticket with the McDonald’s meal dealon it; this allows the customers to purchase a meal for £1.99 where it would normally cost themaround £4.Economies of ScaleEconomies of scale is the cost that is increased from the output of the product produced.Due to the relationship between the quantity of products produced and the fixed costs that areinvolved within the production, the higher amount of goods produced will enable lower fixedcosts.The benefits of economies of scale to India is that they are able to purchase a greater amount ofgoods because of the lower fixed costs which will cost less overall.There are two main types of economies of scale, these are internal and external internaleconomies of scale is the factors that arise from within the company, these consist of productioncosts; these also include the costs of materials etc An example of how economies of scale canarise within businesses are investments into high quality and expensive machinery(Cravino andLevchenko, 2016).P2 Describe the mechanisms that regulate international trade.Free TradeFree trade is a policy formed between two or more nations that permits the unlimitedimport or export of goods or services between partner nations. However, not all trade is freetrade. When nations don't have free trade agreements, which are treaties that outline theparameters of trade between trade partners, tariffs are imposed on goods and services. Tariffs aretaxes that nations impose on imports. Tariffs increase the cost of goods, which is passed on toconsumers.2
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