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McDonalds adapting globally to cultures

Updated on May 21, 2013

McDonald around the world has achieved success by embracing globalization. It thinks globally
and acts locally. For instance its advertising campaign I'm Lovin' It has been advertised
globally but the characters and the background setting has been adapted in accordance with the
local culture and customs.

Similar is the case with its food offerings. It offers customers taste and appearance variations
according to their culture and religious customs. For instance to establish itself in India where
Hindus do not eat beef and Muslims do not eat pork, it has introduced Vegetable Mc Nuggets and
a mutton-based Maharaja Mac. These kinds of innovations are necessary to stay ahead of
competition .Furthermore Paneer Salsa and fish items such as Filet-O-Fish have been presented
to the consumers.

In Middle East it has adapted to the needs of the locals and introduced Mc Arabia which is a
chicken grilled sandwich served on a flatbread as Arabs prefer. For Islamic countries such as
Pakistan, Malaysia and Morocco it has obtained the certification for halal food and has
advertised it on all its menus so Muslims and religious groups dont make an issue out of it.
Ramadan is a sacred month for Muslims and therefore the Moroccan menu offers dates, milk and
cookies.

In tropical countries it has added guava juice to its menu for consumers to beat the heat while it
offers beer to its consumers in France and Germany as the local culture is to drink and party. In
China, Mc Nuggets are offered with chili garlic sauce (very much liked by Chinese).In Israel
McDonalds had to change its menu to respect the regulations of the Jewish Halakhic law
framework and kosher restaurants which does not allow eating a mixture of meat and milk and
thus McDonalds separated the diary product (cheese) and meat from its Big Macs after several
protests.

Last but not the least, in Singapore McDonalds launched Kaisu Burger based on the popular
comic strip character Mr. Kaisu and later launched Kampung Burger which was based on a
cartoon character, Kampung Boy. It had launched the Kampung Burger to denote the customary
values associated with village life. Besides that it also offered desserts and beverages such as
mango and durian milkshakes to appeal to local taste.

In short, McDonalds have adapted globally to customers taste buds and choices but the structure
of its menu has remain standard; it offers sandwich/burger, fries and soft drink (Coca-Cola) as its
main course. The main course (burger) may have variations but its the thin long crispy fries
which is a signature/hallmark of this reputed brand.

Nike Global Business and Challenges


Updated on October 14, 2009

Legal, Cultural, and Ethical Challenges that Nike Faces in


Global Business
This hub examines the Nike Sweatshop Debate, and addresses the following:

1) Summarizes Nike's case focusing on key points


2) Describes the legal, cultural, and ethical challenges that confront Nike as a global business.
3) Determines the various roles that the host government played in this particular global
business operation.
4) Summarizes the strategic and operational challenges facing global managers illustrated in
Nike's case.

Nike - Successful Global Business doesn't come without Challenges.

Once a company, like Nike, decides to become a global entity, it will often experience an
increase in profitability. Unfortunately, companies like Nike must overcome some difficult
obstacles before establishing a successful business in a foreign country. Some of the issues of
concern are child labor laws, wages, and outsourcings effect on sales. Because of this, most
widely known companies have presented various cases to defend their positions on conducting
business in the foreign country. One such example is a Nike sweatshop labor case that stirred up
a large amount of controversy over ethical business practices. Even though Nike has attempted to
recover from the bad press it received about the sweatshops, it still struggles to defeat the
negative feelings from people across the United States. Thus, a summary of the case, the legal,
cultural and ethical challenges, an understanding of the roles the host governments play, and the
strategic and operational challenges faced are important to gain a thorough understanding of the
issues and case.

Most people could easily define Nike and are familiar with the products offered, like the
customized options available in the Nike store online, Nike Sportswear, Nike Women, Nike
Basketball, and Nike Football. These products, among others, have led Nike to a profit of $15
billion in 2006 and a catchy Just Do It! slogan (Hill, 2009). The company outsourced its
manufacturing plants to several countries in order to lessen costs and become more efficient in
productivity. The outrage and protests that followed were far from what Nike expected; the
company was labeled as forcing children to slave away in hazardous conditions for below-
subsistence wages (Hill, 2009). As a result, protestors of globalization and human rights
activists criticized Nike for taking advantage of the workers overseas and placing them in a
destructive working environment. Moreover, the fact that Nike was making billions of dollars
and still failed to provide a safe working environment only made matters worse. After Nike
realized it was the target of several protests and complaints against globalization, it recognized
the need for safer work environments and an adherence to certain standards for each of the
overseas factories. The factory workers were forced to work exceptionally long hours to fulfill
quotas and had to follow strict rules during work for below minimal pay despite having 77
percent of the employees in Vietnam suffer from respiratory problems (Hill, 2009). Therefore,
the legal, ethical, and cultural challenges began to add up for Nike and it was time for the
company to confront them.

The majority of challenges Nike had to overcome involved ethical issues and debates. Even
though Nike was providing jobs to those who may not otherwise have one, it was paying a mere
$1.60 a day to Vietnam factory workers when the living wage is at least $3 a day (Hill, 2009).
Nike could have avoided this challenge by paying each employee worker the living wage of the
country he or she lives in to purchase necessary items. Moreover, the living wage is a cultural
expectation which Nike failed to meet that led to protests. Another ethical issue involved a
report that found workers with skin or breathing problems had not been transferred to
departments free of chemicals and that more than half the workers who dealt with dangerous
chemicals did not wear protective masks or gloves (Hill, 2009). The debate was over the unsafe
conditions Nike was providing its factory workers while it experienced continual increase in
profits. Nike was also criticized for failure to follow child labor laws by hiring children who
were not allowed to work and forcing them to work overtime for below minimal pay. For
example, according to Global Exchange, in one factory, owned by a Korean subcontractor for
Nike, workers as young as 13 earning as little at 10 cents an hour toiled up to 17 hours daily in
enforced silence (Hill, 2009). Exposing workers to harsh and toxic chemicals including
carcinogens were also factors that placed the company at odds with human rights activists. The
company attempted to redeem itself by stating it had formulated an action plan to deal with the
problems cited in the report, and had slashed overtime, improved safety and ventilation, and
reduced the use of toxic chemicals (Hill, 2009). Even though Nike took steps to improve the
accusations in the report, it should have been corrected once it was aware of the conditions and
provided each worker with a fair and safe work environment.

Ernst & Young was the accounting firm hired by Nike to conduct an audit of its business
practices; however, the discovery became public knowledge instead of remaining confidential.
Another host government that played a role is one-time hired U.S. Ambassador to the United
Nations and former Atlanta Mayor and Congressional representative Andrew Young; his role
was to assess working conditions in subcontractors plants around the world (Hill, 2009).
Unfortunately, there were accusations made that stated discrepancies in his report and the method
by which the report was conducted. Moreover, Nike joined a task force called Fair Labor
Association to assess whether companies are abiding by the code and banish sweatshops in the
shoe and clothing industries (Hill, 2009). The debate over independent auditors performing
audits of overseas factories came from the United Students Against Sweatshops to ensure a truly
independent audit (Hill, 2009). Nike is a widely recognized brand, which is the reason
severalother host governments became involved in the sweatshop case.
The strategic and operational challenges Nike faces are vast and will require a large amount of
time and effort. This is especially true because the operational practices and strategies Nike
previously adhered to was no longer effective; rather, those practices began to hinder its success.
One operational challenge Nike faces is the development of a strict monitoring system in its
factories overseas. On the other hand, hiring a firm to ensure accurate accounting reports are
produced is a strategic challenge. Moreover, determining a country to set up another factory in is
both a strategic and operational challenge. Nike faces several challenges; however, it can achieve
continual success through an effective operational and strategic plan.

Therefore, the factories and sweatshops established overseas by Nike launched a debate
regarding whether Nike was in compliance or violation of ethical guidelines and regulations.
Despite several attempts, Nike is still the focus of protests regarding violation of child labor laws
and unsafe working environments. Moreover, numerous governmental organizations have
worked with Nike to ensure safe and ethical business practices and to monitor the sweatshops
Nike established overseas. Consequently, Nike was forced to change its operational and strategic
plans drastically in order to remain successful and appease labor and civil rights unions. The case
of the Nike sweatshops demonstrated how difficult it can be for a business to become global
because of the different rules and regulations established by that country.

Reference
Hill, Charles (2009). International business: competing in the global marketplace. New York:
McGraw-Hill/Irwin.
Globalisation benefits consumers
Updated on December 17, 2011

Benefits of globalisation to consumers/individuals


The most obvious benefits here is cheaper prices, globalisation leads to increase competitiveness
which leads to price cuts and as a result of this consumers benefits from cheaper prices(Kahn,
1998). Globalisation also gives consumers a more varied selection of products. And it increases
the purchasing power of an individual. For example, if I earn 100 euro a month and 50 euro goes
towards my groceries I only have 50 euro left to spend but when the likes of Tesco, Lidl and Aldi
enter the market I now only have to spend 25 euro to do my shopping and I can easily shop
around and compare prices and now I have 75 euro left which means I can now afford to buy
more with the same 100 euro than I could before these foreign companies entered the market.
However some argue that if foreign competitors enter the market and dominates the market share
they may then raise the price or worse move to a cheaper economy to cut cost leaving consumers
with little or no choices and higher prices set by domestic companies. However I disagree with
this point because if we look at Ireland for example, since the likes of Tesco, Lidl and Aldi
entering the market, this has created more jobs and giving us a wide range of products to choose
from. Tesco and Aldi are ranked in the top 10 food retailers in the world (Supermarket News,
2011) and I highly doubt that these companies are going to pull out of Ireland as they are well
established and are very profitable.
Anti globalisation protesters argue that globalisation is the cause of poverty, just try to tell that to
the people of Taiwan. Over 30 years ago these individuals were as poor as many African
countries, today they are as wealthy as the Spanish. Since Taiwan began modernising, poverty
has cut by half and real wages are ten times higher than they was 40 years ago (Norberg, 2006).
From channel 4s documentary the young Swedish writer Johan Norberg explains how global
capitalism does not lead to poverty in fact he goes on to say that before the people of Taiwan
were able to escape from the bondage of poverty they needed capitalism at home first. This was
done through land reform, if people dont own their lands then what is the incentive for it to be
profitable? (Norberg, 2006).

Industrialisation began through the government encouraging people to turn their lands into
factories. This lead to the formation of sweatshops, Some argue that multinational companies are
exploiting cheap labour , however imagine if consumers refused to buy these goods simply
because some a minority felt it was unethical, then Taiwan would not have passed through this
transition phase and would still be poor. In addition once industrialisation had developed in
Taiwan, the demand for labour rose and wage rates also increased. Acer in Taiwan trained 3000
Taiwanese engineers in, this means that the people benefited through training and education.
Today Acer is the 7th larger IT provider in the world and it continues to challenge innovation
among Taiwanese people. To summarise the effects/benefits of globalisation for the people of
Taiwan: because they were constantly exposed to foreign competition the local companies were
forced to be more productive and innovative. They became specialists in the IT sector (Norberg,
2006). They learnt to produce only what they were good at and imported the rest, this is what
David Ricardo (the creator of free trade economics) meant when he said:

Two men can both make shoes and hats and one is superior to the other in both employments;
but in making hats he can only exceed his competitor by 20 percent, and in making shoes he can
exceed him by 33 percent. Will it not be in the interest of the superior man to employ himself to
make shoes and the inferior man in making hats?(Ricardo, 1996)

The older generation that worked in the sweatshops were able to put their children through
university. Norberg sums this up by saying the older generation made the boxes while the
younger ones built what was inside them (Norberg, 2006).

Bibliography

AGRAWAL, Usha. 2008. Globalisation Poverty and Culture. Delhi: Global Media. Available
from World Wide Web: http://0-
site.ebrary.com.www.library.itcarlow.ie/lib/itcarlow/docDetail.action?
docID=10415972&p00=benefits+of+globalisation
Benefits of Globalisation for Companies
Updated on December 17, 2011
There is no disputing that companies benefit from globalisation. Companies can benefit through
outsourcing and off-shoring. Globalisation makes it possible for companies to find economies
with cheaper costs and buy component parts at a reduce price. It also means firms would have a
global reach thus increasing the potential customers. Samsung and Lucy-Goldstar are two huge
firms in the Korean electronic and telecommunication industry that benefited from globalisation
and now 45% market share in these industries (Bloom, 1993). They transformed low
manufacturing costs into a global market share by subcontracting less important aspects of their
production operations to companies where the economy had low labour cost and both parties
could benefit from it. They outsourced foreign firms who had production technologies, product
design skills and even marketing and distribution channels (Bloom, 1993).

However some argue that these benefits for only apply for multinational companies which are
involved in child labour and are exploiting the cheap labour cost economies. Looking at Taiwan
once again, a local firm Cha for Tea borrowed the Starbucks concepts and made their national tea
tradition popular and is now expanding in the United States and in Japan. This would not have
been possible without the help of globalisation (Norberg, 2006).

The two main components of globalisation involved here are; the globalisation of markets and
the globalisation of production. The globalisation of markets refers to the formation of separate
nations into one global market, this occurs when cultural differences are put aside and standard
products are distributed globally. Companies begin to standardise products. Standardisation leads
to a global market, this is evident when we look at companies like McDonalds and Coca-Cola.

An economic writer states that the major driving force behind globalisation is technology,
everyone in isolated and impoverished areas now wants modernitys allurement (Levitt, 1983).
The main feature of this global market is that standardisation creates a major level of competition
because whether it is consumer goods or industrial components, the same firms compete in each
market they enter. The threat here is that local companies might not be financial capable of
standardising goods which puts them at a competitive disadvantage and would make it very
difficult for them to increase customer loyalty and brand awareness.

Also companies in a global market will always face a higher level of competition so they must
keep employees on their toes by in-house training, development programmes and most continue
to work on new innovative technologies to keep them in the market. This can be very expensive
and also risky for companies with limited resources. The globalisation of production is basically
the ability to source products and goods globally in an attempt to reduce manufacturing costs.
This is evident in the two Korean companies mentioned above. Another great example can be
seen in the Boeing 777 jet Airliner. The 777 contains over 130,000 component parts, which were
out-source from over 500 suppliers around the globe. Suppliers in Japan makes the wings and
doors while in Singapore the landing gear is made and in Italy the wing flaps are produced. This
strategy is not only an attempt to reduce the overall manufacturing costs of the finished jet but in
fact to generate sales from each of the countries which they outsourced to in the first place. The
swan-optical firm is also another example of how the globalisation of production benefits
companies. Swan outsourced its manufacturing and product design activities and in turn created
a competitive edge in the global market place.

Bibliography

AGRAWAL, Usha. 2008. Globalisation Poverty and Culture. Delhi: Global Media. Available
from World Wide Web: http://0-
site.ebrary.com.www.library.itcarlow.ie/lib/itcarlow/docDetail.action?
docID=10415972&p00=benefits+of+globalisation