IBS210 International Business: McDonalds Product Development Strategy

This report delves into the challenges faced by McDonalds in maintaining a standardized product development strategy across diverse international markets, considering varying customer preferences. It analyzes the issue of balancing global consistency with local adaptation, particularly in regions with different dietary habits. Two preventive approaches are recommended: market adaptability and maximizing product diversity, each with its advantages and disadvantages. The report suggests that a market adaptability approach, where products are tailored to local tastes, would be more effective for McDonalds, despite potential cost increases. The importance of a standardized service delivery process alongside adaptive product development is emphasized for long-term success. This assignment contributed to Desklib provides insights into international business strategy and product management.

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Introduction
In the current business scenario, initiating the product development process is much
difficult than it was before. This is due to the reason that modern day businesses are having
diverse sets of customers with different taste and preference patterns. Thus, it is very much
challenging for the international business managers to come up with different variants of the
particular product in meeting the diverse requirements (Khan et al. 2013). McDonalds is one of
the leading fast food chains in the world and they are having their operations across different
countries and catering to different sets of customers. However, it is also posing challenges for
them to maintain their standardized product development strategy due to the reason that
customers from different regions will not have similar level of acceptances for the introduced
product.
This paper will further discuss about this issue along with the recommended strategy that
can be initiated for mitigating the identified issue. In addition, the advantages and disadvantages
of the two preventive approaches will also be discussed.
Analysis of the identified issue
Majority of the products of McDonalds such as McChicken are being offered across the
world. However, due to the differences in the food habit and preferences of the customers in
different regions, the acceptances towards the same product of McDonalds are also different. For
example, large part of Indian subcontinent is vegetarian and thus the potentiality of McChicken
is less in this region (Santos et al. 2017). Particularly for this, McDonalds is having same product
with potato fillings. On the other hand, there are different regions where beef is more preferred
over chicken and thus McDonalds is having beef based items in these markets. It is very

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challenging for the international business managers to initiate the product development strategy
according to the market trends and requirements. Moreover, changes are evident in the customer
trend across the world and this is further posing challenges for the managers to determine the
different intensity of the changes and initiate product development process accordingly. In the
initial stage, international managers had to face lower diversity due to the limited global presence
of McDonalds. Thus, they have not faced the challenge of catering to various needs and
preferences of the customers (Gopalakrishnan et al. 2015). However, in the recent time,
McDonalds have entered in more countries and posing challenges for the international business
managers in developing products for different customer segments.
Identification of the preventive approaches
It is recommended that one of the most effective strategic approaches for McDonalds will
be having market adaptability practices in their global operation. This is due to the reason that
with the help of the market adaptability approach, McDonalds will be able to offer products as
per the respective market trends (Ahmad, Mallick and Schroeder 2013). Moreover, with the help
of the market adaptability approach of McDonalds, the level of market penetration for them will
be less. This is due to the reason that if the products offered according to the local taste and
preference pattern of the customers, then their acceptance level will be more. However, on the
other hand, this should also be noted that there are few limitations also to be faced by
McDonalds in terms of this strategy. One of these limitations will be the increased cost in
developing new products. This is due to the reason that with the initiation of the market
adaptability strategy, McDonalds will have various product development processes in different
regions and this will further incur added cost in research and development (Manahov and
Hudson 2014). In addition, the standardized business approach of McDonalds across the world

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will also be affected. Customers will have different products in different stores of McDonalds
across the world and this will cause difficulty for McDonalds to maintain their uniform
approach.
Another recommended approach for McDonalds will be maximizing the product diversity
in their global operation. This refers to the strategy of having larger product assortment across
the global operations, which will enable to cater to different taste and preference pattern of the
customers. Moreover, with the help of the diversified global product portfolio, the targeted
audience for McDonalds across the world will get increased due to the reason that different
sections of the customers based on their different taste and preference pattern can be fulfilled. In
addition, due to the initiation of this strategy in the global basis, McDonalds will also not face
the issue in managing their uniform business process and the service offerings can also be
maintained in uniform manner (Schoenherr and Swink 2015). This will also reduce the cost of
developing products in different markets. However, on the other hand, increasing the product
diversity will also increase the business risks. This is due to the reason that different products
will have different sets of preferences and irrespective of the diversified product portfolio of
McDonalds, only the certain products will get sold in a particular region. For instance, if
McDonalds offers both non vegetarian and vegetarian items across their global operations, then
also the non vegetarian items will be sold more in the American market and vegetarian items will
get sold more in the Indian market (Harrington and Ottenbacher 2013). This will in turn increase
the cost of managing the diverse and larger varieties of products in the global operation of
McDonalds. Hence, it can be concluded that both the recommended approaches are having
advantages as well as disadvantages for McDonalds.
Overview of the recommended strategy

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From the above analysis, it is identified that market adaptability approach in product
development process will be more effective and fruitful for McDonalds. This is due to the reason
that with the help of the market adaptability approach, McDonalds will be able to introduce new
products as per the market trends and demands (Liu, Campbell and Pei 2013). Even if the cost
for initiating number of product development process gets more for McDonalds, still that can be
adjusted with the higher probability of market penetration. Thus, higher market penetration will
ensure more generation of revenue for McDonalds. Furthermore, it should also be noted that
market adaptability approach should be flexible in nature in order to have the products as per the
current customer taste and preference pattern (Mehrjerdi and Dehghanbaghi 2013). The service
delivery process should be standardized even if the product development process is being
adaptive to the local market trends. This is due to the reason that if the service delivery process
of McDonalds can be standardized, then their uniformity can be maintained and along with the
market adaptive product development process, this strategy will prove most value for
McDonalds in the long term.
Conclusion
Thus it can be concluded that product development process is one of the major issues
being faced by the international managers of McDonalds. The major reasons for the identified
issue are being discussed in this paper. On the basis of the identified issue, two probable
approaches are also being recommended in this paper along with the discussion of their
respective advantages and disadvantages. Based on this, it is concluded that McDonalds should
initiate market adaptability approach in terms of their product development strategy and
standardized approach in terms of the service process delivery. This will ensure that the

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challenges being faced by McDonalds in terms of their product development process can be
mitigated.

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Reference
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