McDonald's Global Expansion Strategies

This assignment focuses on analyzing the global expansion strategies of McDonald's Corporation. It emphasizes the importance of evaluating both internal and external environmental factors to develop effective strategies for increasing sales and profits. The analysis draws upon various marketing models and concepts to provide a comprehensive understanding of McDonald's international marketing approach.

EXAMINATION PREP-
INTERNATIONAL
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................1
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
International marketing refers to the activities of the business which involves in the flow
of good and services to the people in different countries so as to earn more and more profits. It
mainly includes the application of marketing principles in different country to expand there
business all over the world (Berthon and et.al., 2012). In this report, different models and
theories are been used in McDonald with determining its advantages and disadvantages.
International business and EPRG model
Ethnocentric Poly-centric Regio-centric Geo-centric
In this McDonald
evaluate the
characteristics of
domestic and
international
companies.
They evaluate the
opportunities of
market in different
countries and
marketing mix is used
to determine the need
and requirements of
the people.
In this the company
find the characteristics
of various
multinational
companies.
The adoption of
marketing mix by the
respective managers
(Cateora, Gilly and
Graham, 2011).
The features of global
as well as transactional
companies are been
considered.
The strategies are been
formulated to fulfil the
opportunities of
particular region.
In this the marketing
strategies are been
adopted by
considering the
opportunities by both
extension and
practising it in global
market.
This model is highly beneficial for the company to evaluate the opportunities which are
been identified in the market. On the other hand, sometimes these can have a negative impact on
the existing image of the organization.
Standardisation and adaptation of marketing strategy
Standardisation Adaptation
This approach will ensure that the features of
the products will be similar irrespective of the
By adopting this method, McDonald have to
develop with its activities according to the
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country in which the McDonald is been
serving. Moreover, they focus on the similar
market segment across the country. This will
ensure that there is universal specification of
the products. Thus, it must make sure that the
production of the products and the services
rendered as unanimous all over the world.
country in which they are expanding. This
means they need to consider the preferences
and needs of the people of the respective place.
They have to meet the living standards and
economic conditions of the particular country
in which they have to serve with the products
(Griffith, 2010). Moreover, the laws and
regulations of the country are to followed so as
to perform with there activities.
It is beneficial to adopt with on of the two approaches as it will help to lead the company
the way in which they need to perform with there activities. Further, it becomes difficult for
McDonald as to which approach will be beneficial for the company in the long run.
PEST analysis
To expand the activities in different countries, it is important for McDonald to consider
these factors for the positive results.
Political Economical Social Technological
It mainly involves the
following factors:
 Stability of
government
 Taxation policy
 Social welfare
policies
It also may suffer with
risk related to country.
It involves:
 Unstable
political system
 Failure in the
Under this the factors
involved are:
 Inflation
 Business
cycles
 Disposable
income
 Interest rates
Further, under this
they faces financial
risks which mainly
includes the factors
like asset valuation,
The social factors
includes the lifestyle
changes, level of
education, values and
cultures etc. of the
people.
This factors also faces
with the cross cultural
risk which includes
differences in culture,
ethical practices etc.
For this, they need to
identify the healthy
The factors involved
under this are:
 New
developments
 Spendings of
government on
research
Thus this factor is
incorporated with
commercial risks
which includes poor
execution of strategy,
intensity of
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economy of
nation
 Inappropriate
legal factors
They need to evaluate
with the civil and
political factors so as
to develop with the
strategies according to
them.
exposure of currency
and asset valuation.
To serve with food
and services in
different countries, it
is important to
identify the average
disposable income of
the people so as to
develop with the
product accordingly
(Jean, Sinkovics and
Kim, 2010).
lifestyle of the people
so that they can serve
them with the
appropriate products
and services.
competition and many
others.
According to the
country in which the
firm is been expanding
must ensure there
technological aspects
and use the
equipments
accordingly.
This method is highly efficient to evaluate the macro-environmental factors which have a
greater influence on the operations of the company. Further, some norms determined by the legal
authority may hinder the performance of the organization.
Selecting an international target market
McDonald need to serve with the products and services in India Thus for this they need to
identify and consider all these factors in an efficient manner. As India is highly democratic
country which means it is run by federal form of government. Further, the GDP of India is
growing on a higher pace which means the opportunities for growing the companies is
increasing. As per the social consideration, McDonald need to develop with vegetarian food as
mostly the people are preferring veg food over non-veg. Thus wide varieties of veg food must be
involved in the menu of the organization (Luchs and et.al., 2010). With the face of time, there is
technological advancement at a higher level which means greater technological equipments can
be used by the company to perform there operations. There is high rate of political stability
which means that McDonald do not have to change there strategies on a regular basis. In addition
to this, they need to evaluate with the risks which are involved with the expansion of the business
in India. This may include the cross-cultural, commercial, country as well as currency risks.
Thus, prior to the implementation of this McDonald must ensure that the following risks are been
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considered and it will not have any negative impact on the functioning of the company.
Moreover, for setting up with the unit they need to find the adequate physical infrastructure
which may be attracting large number of customers. Furthermore, it is important for the company
to to evaluate the labour rates and there availability so that they manage with there activities in
an efficient manner. In addition to this, while selecting with the place it is very crucial to seek
that marketing mix process is efficient fitting as per the activities of the company (Majaro,
2013).
It helps the company to select with the country which can assist them with high profits
and increase in sales volume. By evaluating all the factors, it come to know that which country
will benefit on a greater extent. In contrast to it, expanding a business is a very big task so it
involves with high amount of risk with it. Thus, it may have many problems while expanding the
firm.
Decision regarding mode of entry
Form Control Risk
FDI If the McDonald will adopt
with this form form for
expanding with there business
than the entire control will be
in the hands of the
organization. This means that
they are responsible for
making the decisions regarding
the functioning of the
company (Paliwoda and
Thomas, 2013).
As the company itself makes
all the decisions, it involves
high rate of risk as they may
not be aware of the activities
which may have negative
impact on the operations of the
company.
Licensing In this the company gives
rights to other firms to adopt
with there production process
and serve with the goods and
services to the customers. In
In this, there moderate risk
involved for the company as it
is not directly responsible for
the loss occurred. Thus, the
firm who has taken with the
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this, the individual firm is
responsible for taking there
decisions but considering with
the norms of the company.
license have the bear the loss
faced (Sheth, 2011).
With the adoption of these form, it will assist McDonald to acquire the control in there
hands which means they can run there organization as per there needs. On the other hand, it
involves large amount of risk factor with it as they are directly responsible for the loss occurred
by them.
International culture
It is an important factor which need to be considered by McDonald for expanding with
there business in different countries. As it is very crucial to determine with there culture and
develop the products and services accordingly. The following are the factors which need to be
acquired while establishing the firm. Values and beliefs- McDonald need to consider the values of the people while serving
the customers. This means that they should not perform with the activities which may
hurt the sentiments of the people. Moreover, the beliefs of people are also very important
while developing with the products (Steenkamp and de Jong, 2010). Taste and Preferences- For producing with the goods, it is very crucial to consider with
the taste and preferences of the customers as to what are the needs of them for the
products and services. Thus, they must evaluate the choices and serve them with the best
food. This will further satisfy the customers to a greater extent. Religion- As in India most of the people are from the religion which acquire vegetarian
food products. Thus, it becomes important for McDonald to develop with the products
which are purely veg so that they can satisfy the customers to a greater extent.
 Language- The workers appointed in the store must know the language of the people in
which it is been situated so as to provide with greater assistance to the customers. Thus, it
will highly help the people to make the order easily and can avail the services in an
efficient manner (Stephen and Galak, 2012).
It helps the company to formulate with the goods and services as per there values and
beliefs so that it do not hurt there sentiments. On the other hand, it becomes a problem for the
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organization as each person has its own choices and preferences so it is impossible to develop
with the products which are accepted by all.
Consumer behaviour
McDonald need to study the behaviour of the customers so as to serve them with better
assistance and provide them with high quality products. Further, the lifestyle and standard of the
people to whom they are targeting. This will help them to develop with the products as per there
considerations. In addition to this, it is also important to evaluate the demographic, socio-
economic and geographic factors which will assist in developing the products and services
according to the customers. The purchasing power of the people must be seen so as to develop
with the most appropriate pricing strategy. Moreover, the health considerations must also be
taken care of by McDonald as to what are the eating habits of the people. As in the present time,
it is been seen that people are preferring healthy food so they must develop with the products to
provide the products as per there requirements (Terpstra, Foley and Sarathy, 2012).
It is highly beneficial for the company to adopt this approach as it will provide clear
determination of the products which need to developed by the firm. Further, it may include large
amount of money to evaluate with the needs of the people as conducting with a survey requires
huge amount and time.
Marketing decisions
To take an efficient marketing decisions, it is important for McDonald to use marketing
mix in a proper manner. This is an effective method which mainly involve four elements: Products- To provide the people with greater assistance, McDonald need to adopt with
the range of vegetarian products as in India people mainly prefer veg food. So it becomes
crucial for the company to acquire the needs and requirements of the customers and
develop with the products accordingly. Price- It is one of the most important factors which determines the level of sales volume
of the company (Marketing Mix – The 4 p’s of marketing. 2014). Thus, McDonald need
to adopt with the pricing strategy after evaluating the strategy used by its competitors. Place- McDonald needs to set up there physical outlet where more and more people can
reach and can avail with the services in an efficient manner.
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 Promotion- After the production of the products, it is very important to go with efficient
promotional techniques so as to attract wide range of customers towards there
organization.
This method will help the company to make an efficient marketing decisions so as to earn
maximum profit and serve the people with greater satisfaction. In contrast to this, this will limit
the assess of the company as by this they will only target few people so they cannot satisfy all
the customers.
CONCLUSION
From the above report it can be concluded that for expanding the business all across the
world, it is important for McDonald to evaluate external as well as internal environmental
factors. It will assist in developing with the strategies in an efficient manner which will
ultimately increase the sales volume and profit of the company. Thus, several other models are
also adopted to have a greater assistance in the expansion of the business.
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REFERENCES
Journals and Books
Berthon, P. R. and et.al., 2012. Marketing meets Web 2.0, social media, and creative consumers:
Implications for international marketing strategy. Business horizons. 55(3). pp.261-271.
Cateora, P. R., Gilly, M. C. and Graham, J. L., 2011. International marketing.
McGraw-Hill/Irwin.
Griffith, D. A., 2010. Understanding multi-level institutional convergence effects on
international market segments and global marketing strategy. Journal of World Business,
45(1), pp.59-67.
Jean, R. J. B., Sinkovics, R. R. and Kim, D., 2010. Drivers and performance outcomes of
relationship learning for suppliers in cross-border customer-supplier relationships: The
role of communication culture. Journal of International Marketing. 18(1). pp.63-85.
Luchs, M. G. and et.al., 2010. The sustainability liability: Potential negative effects of ethicality
on product preference. Journal of Marketing. 74(5). pp.18-31.
Majaro, S., 2013. International Marketing (RLE International Business): A Strategic Approach
to World Markets. Routledge.
Paliwoda, S. and Thomas, M., 2013. International marketing. Routledge.
Sheth, J. N., 2011. Impact of emerging markets on marketing: Rethinking existing perspectives
and practices. Journal of Marketing. 75(4). pp.166-182.
Steenkamp, J. B. E. and de Jong, M. G., 2010. A global investigation into the constellation of
consumer attitudes toward global and local products. Journal of Marketing. 74(6). pp.18-
40.
Stephen, A. T. and Galak, J., 2012. The effects of traditional and social earned media on sales: A
study of a microlending marketplace. Journal of Marketing Research. 49(5). pp.624-639.
Terpstra, V., Foley, J. and Sarathy, R., 2012. International marketing. Naper Press.
Wilson, A. and et.al., 2012. Services marketing: Integrating customer focus across the firm.
McGraw Hill.
Online
Marketing Mix – The 4 p’s of marketing. 2014. Available through: <
http://www.marketing91.com/marketing-mix-4-ps-marketing/> [Access on 3rd December
2016].