Overseas Expansion A Case Study of McDonald's

Added on - 21 Apr 2020

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Running head: OVERSEAS EXPANSION: A CASE STUDY OF MCDONALDOverseas Expansion[McDonald]Name of the student:Name of the university:Author note:
1OVERSEAS EXPANSION: A CASE STUDY OF MCDONALDOverseas expansion is now very common with many small and large sizeorganizations. This is full of opportunities to many while on the other hand it offersbunch of challenges as well. Despite the fact there is an incrementing trend in theoverseas expansion. The expansion has benefitted the many while on the other side ithas challenged the survival of few others (Pan et al. 2017). McDonald is no otherexception. The company has started its journey from being just a family burger tobecome a global recognition (Hak and Grębosz 2016). The study shows a brief journeyof McDonalds to the position it is at present. Moreover, the main purpose of thisassignment is to understand the process of internationalization through the example ofMcDonalds.Types ofMotivationhad kept on changing with McDonald. They had initiallyused thetraditional motivation, which is one of the kinds of motivation. McDonald hadused traditional motivation while the company was in the stage ofresource seekingandmarket seeking. The first international expansion came in the year 1967 when itopened up its store in Canada. The expansion occurred when McDonald hassuccessfully crossed the resource seeking stage after 27 years of its establishment.After 27 years of the establishment, the company had felt the necessity to look for themarket seeking strategy and therefore, it started its operations in Canada (Hutchinson,Singh and Walker 2012). The company had also usedemerging motivationthroughcompetitive positioningandglobal scanning. The company had shown theirextensive focus on the emerging markets, which is why it had used the competitivepositioning and global scanning strategy to capture the target market. McDonald is veryless active with the competitive positioning strategy as they are almost the same acrossthe globe. However, minimal level of differentiation can still be found in the company.Forexample, McRice in Indonesia is a food that suits the food culture of the peopleliving in Indonesia (Budiman 2012). McBeers are sold in Europe and Asia to satisfy thecultural beliefs of people living in those regions (King et al. 2012).Global scanningisthe other strategy that McDonald has used to expand into the international market.McDonald has been sequential in approaching to the various international centers.Global scanning has actually helped the company expand to the various internationalmarkets at a very appropriate time. Forexample, McDonald started its expansion in theyear 1967 in the closest markets. Later on, it moved to more distinct nations. Themaximum expansion happened in the period of 1990s when there was political,technical and economic changes on a global scale. However, the expansion processslowed down after 2000 due to international economic downturn and due to someinternal issues (Badal 2017).Prequisitionorprior to expanding into the global market, McDonald use toadopt a specific strategy such as providing location specific advantages.It is specific toMcDonald that they provide location specific advantage to customers to grab theirattention. Forexample, they have not used beef in preparing their food just toencourage the beliefs of a large group living in the country. Anotherexampleis oftargeting both the lower and the middle income group as their population is very high inthe country. In doing so, the company has actually targeted a mass population(Gerhardt, Hazen and Lewis 2014).Anotherexampleis of differentiation in their foods,which they bring to satisfy the requirements of diverse customers across the globe. One
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