International Business: Analysis of McDonald's Expansion Strategies

Running head: INTERNATIONAL BUSINESS
International Business
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1INTERNATIONAL BUSINESS
Table of Contents
Introduction to International Business.............................................................................................2
Introduction of the Company...........................................................................................................3
Analysis...........................................................................................................................................4
SWOT Analysis...........................................................................................................................4
Growth Strategy...........................................................................................................................6
Business Model and Entry Strategy.............................................................................................7
McDonald’s Model of Franchise.................................................................................................8
Products and Services Standardization........................................................................................9
Higher Identification via Promotional activities........................................................................10
Effective Control over Costs.....................................................................................................10
Pricing Strategy.........................................................................................................................11
Political Sensitivity....................................................................................................................12
Environmental Friendliness.......................................................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................15

2INTERNATIONAL BUSINESS
Introduction to International Business
International business can also be referred as the study of internationalization procedure
of multinational enterprises. It encompasses all the commercial activities, which take place in
order to promote and transfer goods, resources, people, services and ideas. In simpler terms,
international business commonly refers to the trading of goods, services, capital, knowledge,
technology at the global level (Meyer & Peng, 2016). Moreover, international businesses involve
the cross border transactions of services and goods between two or more nations. The
transactions of the economic resources in turn, include skills, capital as well as people for the
purpose of international production. The international production comprises physical services
like finance, insurance, construction, banking and other goods. International business can also be
regarded as globalization (Shenkar, Luo & Chi, 2014).
The purpose of the report is to throw light on international business and the major
strategies for a company to become international. The case study of McDonald’s Company is
being taken in order to analyze and evaluate their marketing strategies for becoming
international. It is examined that in order to conduct a business overseas, several companies must
separate the national markets into a single global marketplace. Specifically, there are two main
factors, which underline the trends of greater globalization. The primary factor comprise the
eliminating barriers of making cross border trade easier, that is, free flow of the goods, capital
and services. On the other hand the secondary factor is related to the changes in the technological
areas, particularly the developments in information processing, transportation technologies and
communication (Cano-Kollmann et al., 2016).

3INTERNATIONAL BUSINESS
Thee report will highlight certain factors of international business by introducing it in the
report. In addition to this, the report will focus on the McDonald’s Company and its plan for
expansion on the international platform. Moreover, it will highlight the case studies of
McDonald’s as a leader of fast food industry. The aim as well as purpose of the report is to
analyze as well as evaluate the key drivers, which impact the company’s strategies and success.
On the basis of that, a SWOT and other strategic analysis are being done for gaining a detailed
understanding of McDonald’s Company’s future expansion areas.
Introduction of the Company
Globalization has made the world considerably smaller in size. The state lines have
practically turned into a divider, which separates the regions of the massive unitary community.
The businesses are the ones which get highly affected by this type of occurrences. In the world of
globalization, the business of fast food is a vast as well as growth oriented industry (Cavusgil et
al., 2014). Moreover, without any doubts, McDonald’s is one of the leading fast food retail
chains, amongst others. The strategy of the industry is continued growth, remaining an efficient
as well as quality producer, offering highest values of effective marketing and lastly; exceptional
services of customer care.
McDonald’s can be considered as a global scale brand. Since its inception in the year
1973, the company began expanding domestically all throughout United States and thus, formed
its brand recognition. The initial strategy of the company began through advertisements directly
to the upper and middle class citizens, as it was seen in developing countries like China.
However, it is seen that most of the bargaining deals on several food items, the company began
to cater to a large number of audiences, especially those who belonged to lower class. The key