Key Trends Affecting Multinational Companies: A Case Study of McDonald

This document discusses the key trends affecting multinational companies, using McDonald as a case study. It explores social, political, cultural, and economic factors that impact operations and provides recommendations to overcome global challenges. The document also includes a market analysis using the Ansoff Matrix.

International
Marketing
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Table of Contents
INTRODUCTION...........................................................................................................................3
Key trends affecting the operations of Multinational company..................................................3
McDonald background................................................................................................................3
Activity conducted by McDonald...............................................................................................4
Market analysis...........................................................................................................................4
Global challenges faced by McDonald.......................................................................................5
How to overcome challenges......................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
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INTRODUCTION
Standardisation is considered as process of implementing as well as developing technical
standards that are based on agreement of different parties which consider firms, interest group,
standards organizations, users and government (Aguirre de Cárcer González-Quevedo and et.
al., 2020). It is mainly adopted by multinational companies in order to ensure that they are
offering quality products and services to potential customers. Around the world there are several
multinational companies who conduct their work according to standardisation methods such as
McDonald, Coca Cola and Hewlett-Packard Company (HP). The organization selected for
respective report are company background, its activities, competitive position by using method
and it also include global challenges which firm faced and recommendations related to it.
Key trends affecting the operations of Multinational company
As the MNC's operate globally it also has to abide by the compliances of the the country
where it is performing. Below some of the main trends which affect operations of multinational
companies like McDonald, HP and Coca Cola are mentioned:-
 Social factors- A country which is underdeveloped, there company has to focus more on
door to door services rather than online selling as they are not aware about the new
technology, moreover they will find it difficult to use it.
 Political factors- A country having political instability, makes it difficult for the outside
company to work in that country as when government is continuously changing it will
also hamper the trade policies (Bahadir and Bahadir, 2020).
 Cultural factors- As every country have different cultures whether traditional or modern,
the MNC operating has to keep this in consideration that it should cater the needs of the
consumers like in a traditional country if foreign company is selling only western
garments it will not earn profits as people will not buy it.
 Economical factors- A country where high rate of taxes are imposed on foreign products,
there brand has to launch low price products rather than high priced as the taxes will
automatically increase the prices resulting in low sales.
McDonald background
McDonald is American food company which is dealing in fast food industry. It is
founded in year 1940 by Richard and Maurice McDonald. Its head office is located at the
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Chicago, Illinois, United State as well as their business is nested at the worldwide level. The
respective company adopt standardisation method as they offer products according to the
different geographical location and culture (Capatina and et. al., 2020).
Activity conducted by McDonald
McDonald is conducting business at the fast food industry and they offer wide range of
products such as hamburger, chicken, french fries, soft drink, milkshake, pan cakes, coffee,
breakfast, wraps, desserts, salad, milkshakes and many others. They mainly adopt standardisation
methods for offering their products because through that they offer quality products according to
customers' requirement, geographical location and many more.
Market analysis
Market analysis is considered as tool through which a company can analyse their market
to determine the opportunities for growth. In respect of this an organization may adopt different
models such as Ansoff Matrix. Ansoff matrix is a tool in the used in marketing planning process
by firms to analyse and plan their strategies for growth. It is used to get better understanding of
market, ascertaining the target market and reach of product. It is useful for the organisations who
wants to identify and explore their growth options. There respective method includes four matrix
which are mentioned below in respect of McDonald:-
 Market Penetration - Market penetration strategy focuses on increasing sales of the
existing product in the existing market. This is the least risky option of growth (Khan,
Freeman and Lee, 2020). In respect of McDonald, the management should either
decrease the price or should spend more on advertisement to reach more people in the
market or should start home delivery orders.
 Market Development - It refers to the expansion of product in new market with minimal
product or service development using its existing offering. McDonald can expand its
business to Mauritius as it is a great place for tourist and McDonald is a trusted Brand
now.
 Product Development - Product Development is introducing new product or service in the
existing market to achieve growth. McDonald can introduce variety of healthy and diet
food say healthy burger in the existing market to grow as the youth is becoming diet
conscious now-a-days.
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 Diversification - Diversification is strategy of introducing a new product in the new
market to achieve growth of the organisation. McDonald can expand its business in
Mauritius with variety of healthy and diet food with their existing menu to achieve major
part of the market there (Riswanto and et. al., 2020). Not only the tourist but also the
local people will take benefit of the store.
The best strategy for McDonald to achieve growth is diversification as in this strategy it
has the chance to rule the market of Mauritius with their new product of say healthy Burger.
Global challenges faced by McDonald
When a company operating at the international level they experienced several issues and
challenges that they need to understand and develop strategies to overcome. In respect of
McDonald they also go through several global challenges while conducting operation at
international level, from which some issues or challenges are mentioned below:-
 Foreign rules and regulation – Different nation have different rules and regulation
accordingly which a company need to develop strategies and plans. In respect of
McDonald, they operating in international level so when they expand to any nation they
need to determine rules and regulation of that place. This is hectic for company
management as according to that they need to change their policy.
 Customer expectation and need – It is another major challenge which is experienced by a
company while conducting at global level. It is so because different nation have different
culture due to which their expectation as well as demand are different. In respect of
McDonald they highly experienced this issues because customer expectation and need of
different nation are different (Šerić, Ozretić-Došen and Škare, 2020). For example
McDonald have special offer according to customer demand such as in Japan they offer
Shaka Chiki, in Mexico they offer McMollettes and so on.
How to overcome challenges
There are numbers of strategies and plan which McDonald may adopt in order to
overcome from the global issues or challenges, from which some main are mentioned below:-
 Respective company must conduct market analysis so that they can they develop
strategies and plans according to the need, demand and expectation of customers. This
will also aid in satisfying customers need that help in sustaining in specific market.
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 In addition to this McDonald also need to develop training and development program for
employees who work in new location (Wei, Ang and Liou, 2020). This is so because
through this employees properly learn about new market language and culture that help in
interacting with customers and fulfilling the need and demand.
CONCLUSION
By conducting analysis of above mentioned topic it can be summarised that for every
company it is essential to expand business at the internation level for which they can adopt
internal marketing. This is highly related to the adopting standardisation method so that firm
offer same products and services around the world, by this they able to enhance their market
awareness and shares successfully. In respect of this company need to determine the key aspects
which impact on their operations such as social, cultural, economical and so on accordingly to
that they need to develop strategies. In addition to this an organization also need to conduct
market analysis for determining the opportunities for which they may adopt different model or
theory such as Ansoff matrix. It is also essential for management to determine global challenges
so that they develop strategies accordingly.
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REFERENCES
Books and Journals
Aguirre de Cárcer González-Quevedo, L. and et. al., 2020. International Marketing.
Bahadir, B. and Bahadir, S.C., 2020. Financial Development and Country-Level Advertising
Spending: The Moderating Role of Economic Development and National
Culture. Journal of International Marketing. 28(3). pp.3-20.
Capatina, A. and et. al., 2020. Matching the future capabilities of an artificial intelligence-based
software for social media marketing with potential users’ expectations. Technological
Forecasting and Social Change. 151. p.119794.
Khan, H., Freeman, S. and Lee, R., 2020. New product performance implications of
ambidexterity in strategic marketing foci: a case of emerging market firms. Journal of
Business & Industrial Marketing.
Riswanto, A. and et. al., 2020. The role of innovativeness-based market orientation on marketing
performance of small and medium-sized enterprises in a developing
country. Management Science Letters. 10(9). pp.1947-1952.
Šerić, M., Ozretić-Došen, Đ. and Škare, V., 2020. How can perceived consistency in marketing
communications influence customer–brand relationship outcomes?. European
Management Journal. 38(2). pp.335-343.
Wei, S., Ang, T. and Liou, R.S., 2020. Does the global vs. local scope matter? Contingencies of
cause-related marketing in a developed market. Journal of Business Research. 108.
pp.201-212.
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