FACULTAD DE NEGOCIOS

CARRERA DE ADMINISTRACIÓN Y NEGOCIOS

INTERNACIONALES
“McDonalds Case Study”

Autores:
Araujo Carranza, Carolina
Reyes Masías, Marcos
Martell Enriquez, Emilu

Docente:
Luis Enrique Quiroz Veliz

Trujillo – Perú

2020-1
1. Case Design:

1.1. Background

McDonald's Corporation is an American fast food company, founded in 1940 as a

restaurant operated by Richard and Maurice McDonald, in San Bernardino,
California, United States. They changed the name of their business to a
hamburger stand, and then turned the company into a franchise, with the Golden
Arches logo introduced in 1953 at a location in Phoenix, Arizona. In 1955 Ray
Kroc, a businessman, joined the company as a franchise agent and proceeded to
purchase the chain from the McDonald brothers. McDonald's had its original
headquarters in Oak Brook, Illinois, but moved its world headquarters to Chicago
in early 2018.
In April 1955, the first McDonalds store opened the Illinois and quickly that same
year in Fresno, California, by then the company and reported profits of $ 193
thousand, for 1957 and 40 restaurants, by 1965 the chain had expanded much
more, reaching to the 700 restaurants and to date there are more than 30 million
stores worldwide, an interesting fact is that in 1958 it became the restaurant that
had sold its 100 million hamburger. One of the company's slogans for its success
is registering for three factors: quality, service and cleanliness, although soon
after adding a fourth element that is value or price.
Following one of the expansion strategies, Mc Donald´s made the decision to
open branches in India in the late 1980s and early 1990s. India was going through
its worst economic moment when it could barely bear the expenses of the basic
needs of the people. The government back then, we detected a series of changes
that will open the country to the market and reform the economy. McDonald's
targets its interest in this market, taking advantage of the economic reform that
offers a favorable alternative.
The cultural food dilemma of the new market at McDonald’s had been proposed
to enter India, where 20% of the population only consumes vegetarian meat and
80% does not consume beef or pork. The Muslim religion that is the one that
predominates in this country considers a serious act to consume beef since it
considers it a sacred animal.
 How do the beliefs, uses and customs of Indian consumers influence the
McDonald’s model, in its attempt to suffer this market?

2. Overview of the Company

McDonald's is the world's largest restaurant chain by revenue, serving over 69
million customers daily in over 100 countries across 37,855 outlets as of 2018.
Although McDonald's is best known for its hamburgers, cheeseburgers and french
fries, they also feature chicken products, breakfast items, soft drinks, milkshakes,
wraps, and desserts. In response to changing consumer tastes and a negative
backlash because of the unhealthiness of their food, the company has added to its
menu salads, fish, smoothies, and fruit. The McDonald's Corporation revenues
come from the rent, royalties, and fees paid by the franchisees, as well as sales in
company-operated restaurants. According to two reports published in 2018,
McDonald's is the world's second-largest private employer with 1.7 million
employees.
McDonald's has become emblematic of globalization, sometimes referred to as the
"McDonaldization" of society. The Economist newspaper uses the "Big Mac Index":
the comparison of a Big Mac's cost in various world currencies can be used to
informally judge these currencies' purchasing power parity. Switzerland has the
most expensive Big Mac in the world as of July 2015, while the country with the
least expensive Big Mac is India. McDonald land was a fantasy world used in the
marketing for McDonald's restaurants during the 1970s through the1990s.
McDonald land was inhabited by Ronald McDonald and other characters. In addition
to being used in advertising, the characters were used as the basis for equipment in
the "Play Places" attached to some McDonald's. The McDonald land commercials
alongside the characters were dropped from McDonald's advertising in 2003, but
Ronald McDonald is still seen in commercial sand in Happy Meal toys.

2.1. McDonald’s Corporate Mission Statement

McDonald’s corporate mission is “to be our customers’ favorite place and way to
eat and drink.” This mission statement highlights the significance of customers as
the business focus, while maintaining the company as a major influence on their
food and beverage purchase decisions.

McDonald’s corporate mission statement has the following main components:

  Customers’ favorite place to eat and drink.
 Customers’ favorite way to eat and drink.

In its mission statement, McDonald’s Corporation emphasizes becoming the

favorite of target customers. Based on this aspect, the company considers
customers’ preferences as a major determinant of its business. For example,
to become such a favorite place, McDonald’s develops its menu and recipes to
satisfy consumers’ preferences with regard to fast food products like burgers
and fries. The components of the corporate mission statement focus on two points:
becoming the favorite place and becoming the favorite way. As a fast food
service business, the company develops restaurant
designs and layouts to optimize productivity and customer experience. This factor,
along with menu development, helps make the company’s restaurants and
franchised locations the favorite place to eat and drink. The “favorite way”
component of the corporate mission statement shows that the company aims to
influence
how people eat and drink. This point presents challenges to the business in terms 
of effectively influencing people’s behavior. McDonald’s marketing mix or 4P helps
in reaching this corporate mission, especially by promoting the company, its brand,
and its products, to influence consumers.

3. McDonald’s Corporate Vision Statement:

McDonald’s corporate vision is “to move with velocity to drive profitable growth and
become an even better McDonald’s serving more customers delicious food each
day around the world.” This statement is included in the growth plan that the
company introduced in 2017.
Thecompany’s previous vision statement was “Our overall vision is for McDonald’s t
o become a modern, progressive burger company delivering a contemporary
customer experience”.
The following are the main components of the company’s new corporate vision
statement:

 Move with velocity to drive profitable growth

  Become an even better McDonald’s
 Serve more customers delicious food each day around the world

The first and third components of McDonald’s vision statement show that the
business aims to grow and expand its operations. This aim entails opening more
locations and improving operational efficiency to improve profit margins.
McDonald’s generic competitive strategy and intensive growth strategies support
the growth and expansion objective embodied in this corporate vision statement.
The second component focuses on improving the business. The company does not
specify the type of improvement stated in the corporate vision. However, it is
realistic that McDonald’s aims to implement comprehensive improvements of its
business to include various aspects, such as product development, marketing,
franchising, and human resource development. In following this corporate vision
statement, the company expects growth and an overall enhancement of the various
areas of the fast food restaurant chain business.
4. Products
McDonald's predominantly sells hamburgers, various types of chicken, chicken
sandwiches, French fries, soft drinks, breakfast items, and desserts. In most
markets, McDonald's offers salad sand vegetarian items, wraps and other localized
fare. On a seasonal basis, McDonald's offers the McRib sandwich. Some speculate
the seasonality of the McRib adds to its appeal.
Products are offered as either "dine-in" (where the customer opts to eat in the
restaurant) or "take-out" (where the customer opts to take the food off the
premises). "Dine-in" meals are provided on a plastic tray with a paper insert on the
floor of the tray. "Take-out" meals are usually delivered with the contents enclosed
in a distinctive McDonald's-branded brown paper bag. In both cases, the individual
items are wrapped or boxed as appropriate.
Since Steve Easterbrook became CEO of the company, McDonald's has
streamlined the menu which in the United States contained nearly 200 items. The
company has also looked to introduce healthier options, and removed high-fructose
corn syrup from hamburger buns. The company has also removed artificial
preservatives from Chicken McNuggets, replacing chicken skin, safflower oil and
citric acid found in Chicken McNuggets with pea starch, rice starch and powdered
lemon juice.
 In September 2018, McDonald's USA announced that they no longer use artificial
preservatives, flavors and colors entirely from seven classic burgers sold in the
U.S., including the hamburger, cheeseburger, double cheeseburger, McDouble,
Quarter Pounder with Cheese, double Quarter Pounder with Cheese and the Big
Mac. Nevertheless, the pickles will still be made with an
artificial preservative, although customers can choose to opt out of getting pickles wi
th their burgers. Restaurants in several countries, particularly in Asia, serve soup.
This local deviation from the standard menu is a characteristic for which the chain
is particularly known, and one which is employed either to abide by regional food
taboos (such as the religious prohibition of beef consumption in India) or to make
available foods with which the regional market is more familiar(such as the sale of
McRice in Indonesia, or Ebi (prawn) Burger in Singapore and Japan). In Germany
and some other Western European countries, McDonald's sells beer. In New
Zealand, McDonald's sells meat pies, after  the local affiliate partially relaunched
the Georgie Pie fast food chain it bought out in 1996.

5. SWOT Analysis

5.1. Strengths of McDonald’s

McDonald's strengths make the company the leader in the fast food restaurant
market. This aspect of the SWOT shows the internal strategic factors that
strategically make the organization visible. McDonald's main strengths:

 Strong brand image: It is the twelfth most valuable brand in the world
according to Interbrand. In food, it is the second only behind Coca Cola
(Interbrand, 2017). The McDonald's brand is valued at over € 43 billion. Having
this valuable asset allows you to access cheaper financing, negotiate higher
prices, launch new products and transfer part of the brand's values to it. The
benefits of a strong brand are multiple.
 Moderately diversified market: based on McDonald's presence in most
regions of the world. This factor reduces the risks affected in the market.
 Standardized processes: from the beginning of their existence, their value
proposition and their main element of differentiation for the standardization of
 processes that allows them to serve food in a time register. Today this is still
one of the main hallmarks of this company.

5.2. Weakness of McDonald’s

McDonald's weaknesses are tied to the company's market focus, its products, and
its processes. This aspect of SWOT shows the internal strategic factors that limit
the performance of the company. McDonald’s main weaknesses:

 Limited flexibility in processes

 Little product diversification
 Vulnerability to the decline of Western markets

The standardization of McDonald’s processes ensures consistency, but also

reduces the flexibility of the company to respond to market variations. Low product
diversification corresponding to the company's focus on groceries and beverages,
which is a weakness because it makes the McDonald Sea highly vulnerable to
slowdowns in the restaurant industry. Additionally, the majority of McDonald's
revenue comes from the United States and other Western countries. This is a
weakness because it makes the company vulnerable to economic decline in the
West. This aspect of the McDonald's SWOT demonstrates that the organization
must continue to expand globally, improve its flexibility, and expand its product mix.

5.3. Opportunities of McDonald’s

McDonald's opportunities are tied to the product mix and global growth. This aspect
of the SWOT shows the external strategic factors that can help the growth of the
company. McDonald’s main opportunities:

 Expansion in developing countries

 Market development in the Middle East
 Product diversification

Considering that the company is highly dependent on Western markets,

McDonald's has the opportunity to grow and expand in developing countries, such
as in Asian economies. The company can also use a market development strategy
 in countries in the Middle East that it has not yet entered. In addition, to mitigate the
risks affected in the market, McDonald's has the opportunity to develop new
products or enter new industries.
This aspect of the McDonald’s SWOT shows that the company has opportunities
on a global level to expand and continue to grow.

5.4. Threats of McDonald’s

The threats faced by McDonald's are based on competitive rivalry and socio-
cultural trends. This aspect of the SWOT shows the external strategic factors that
can limit the development of the company. McDonald’s main threats:

 Aggressive competition
 Healthy lifestyle trend
 Anti GMO trend and regulations

The restaurant industry is highly competitive. Aggressive competitors threaten

McDonald's status as the market leader. Also, the trend of healthy lifestyles is a
threat because it discourages consumers from eating at McDonald's, which is often
criticized as a restaurant offering unhealthy products. Furthermore, Genetically
Modified Organisms (GMO) regulations are a threat, as they have the potential to
limit McDonalds' products. The company does not yet have a policy regarding
GMO ingredients. This aspect of the SWOT demonstrates that McDonald's must
develop new policies regarding GMO ingredients, as well as new products to
attract health-conscious consumers.

5.5. SWOT analysis conclusion

We can say first of all that Mc Donnalds is a multinational company that provides
many services to its clients and the world through its franchises is world-renowned,
originally Mc Donnalds was created under the ideals of a family restaurant. Today,
a little of these ideals has changed as such, putting more pressure on its
employees to meet the demand that exists and sometimes puts their food safety at
risk, but only in certain restaurants where the pressure and demand is great,
despite everything. That Mc Donnalds has strived to provide a first-rate service at a
 good price to the consumer as such and also provides motivations to the employee
in an economical way because if an employee is happy the consumer is the same
way. This SWOT analysis shows that McDonald's can improve the viability of its
business through global expansion, especially in high growth markets. Also, the
company can reduce risks by developing new products or entering new fields
related to the fast food restaurant industry. These most relevant actions that can be
taken by McDonald's based on their SWOT analysis.

6. PESTEL Macroenvironmental analysis

6.1. Political-legal factors:

 Regulation on junk food

Concern about so-called junk food is growing as the increase in childhood
obesity in some countries is more than worrisome. It is not at all ruled out to
expect some type of regulation in this sense by the national governments that
hinders or impedes the present and especially future profitability of McDonalds.
 Salary regulation
In some countries, minimum wages are being increased by law, which can
cause a significant “break” in their accounts for companies that use low-skilled
labor such as McDonalds.
6.2. Economic factors:

 Business cycles
I believe that after the world crisis of the last decade, an expansionary cycle of
the economy is now opening, which, although fragile, is an opportunity to heat
up the economic improvement and the increase in consumption, increase the
sales of our company.
 Growth Developing economies
Many economies in developing countries are significantly improving which is
allowing the disposable income of their citizens to improve and therefore
companies like McDonald’s to find ideal conditions for their development.

6.3. Factores Sociales:

 Healthy food growth.

 It is a fact, the demonization of the modification "junk food", being Mc Donalds
the greatest exponent of it. A fact that is beginning to change many eating habits
of much of society. This poses a great threat.

 Veganism

It is a point related to the previous one, but we believe that it has its own entity.
It is not only that people want to eat healthier but that there is a pro-animalistic
current that is growing and that has led to the increase in the number of people
who do not want to feed on other living beings. Although it can be seen as an
opportunity, it is above all a relevant threat as beef or chicken are our main raw
materials.

 Lack of free time

With the full inclusion of women in the labor market, the time available for
families to dedicate to their food has been reduced, thus generating a business
opportunity in fast food, home or pre-cooked food companies.

6.4. Technological factors

• Robotization:

The robotization that we are going to experience and that will affect the
production and service delivery processes will have a great impact on
companies with processes as structured as McDonald’s will change much of the
current workforce.

• Mobile devices:

In many industries, customer experience on mobile devices makes the

difference between companies that are and those that are not successful. This is
both an opportunity and a threat.

• Ecological factors:

Shortage of raw materials, increased pollution, regulation of energy consumption

or environmental protection laws pose a threat to the company's profitability but
 at the same time they represent a way to differentiate yourself while being
respectful of the environment.

7. Analysis of the Micro-environment (5 Porter's Forces)

Continuously analyzing the Opportunities and Threats related to the Micro-
environment and for this we use Porter's 5 forces tool. According to Porter, rivalry
with competitors is given by four elements or forces: threats from new competitors,
the bargaining power of customers, the threat of new products or services, and the
bargaining power of suppliers.

7.1. Threat of new competitors: Moderate.

It is not easy for there to be new players in this sector, at least relevant players
worldwide. The difficulty of creating a recognized brand, the need for funds to
have a wide capillarity, the logistics and distribution processes do not complicate
much the entry of new competitors.
• There are barriers to entry.
• There are mechanisms of scale.
• The value of the brand value is very high. McDonalds 2nd brand in food
interbrand only behind Coca Cola.
• There are high capital requirements (premises, etc.)

7.2. Client negotiating power: Moderate:

The bargaining power of clients is moderate and you can change companies
without any difficulty. If we do not say that the bargaining power of customers is
high, it is because customers are small in size each (individuals and their
families) and therefore do not have the same bargaining power that they tend to
have if McDonalds sales depend on what they do. buy a limited number of
customers.

7.3. Threat of substitute products:

• The threat of substitute products is high. The existing supply for food by
citizens is high and can be satisfied both inside and outside the home.
• Buyer's propensity to replace. It is relatively high. It is true that a company like
McDonalds has loyal customers, but it is no less true that this fidelity is fragile
 and is closely related to factors such as disposable income or new food fads
that prioritize healthy food vs. junk food.
• Relative prices of substitute products. They are low, especially if you substitute
eating at McDonalds for eating at home.
• Cost or ease of exchange of the buyer. The ease of change is high, since you
can change the restoration option without paying anything or anyone.
• High perceived level of product differentiation. It is clear that people like
McDonalds and there is a high perceived level of differentiation, but it does not
help offset the other factors that fuel the threat of high marine substitutes.

7.4. Bargaining power of suppliers: Low

The bargaining power of suppliers is minimal. Suppliers of raw materials such as

beef, chicken, salads, etc. There are many for which competition is high and
their power is low. Only Coca Cola would be saved since, as a soft drink
supplier, it has a strong negotiating position.
This bargaining power of low suppliers is an opportunity for McDonalds to
improve its bottom line by being able to "squeeze" them even more in price
negotiation.

7.5. Rivalry of competitors

As we mentioned, this competitive strength is the result of the 4 factors or

variables previously seen. Burger King, Wendy's, Taco Bell, KFC, Subway,
Chipotle, restaurant chain alternatives are extensive, customer loyalty is relative,
and therefore competition is fierce and ruthless. This rivalry is a threat to the
profitability of a company like McDonald.
8. Ansoff ’s Matrix in the Marketing strategy of McDonald’s

For McDonald’s the marketing strategy that the company can apply is the Ansoff’s
matrix. Basedon the application of the Ansoff ’s matrix, McDonald’s can develop
strategies for the future growth of the organization (Mcdonalds.com 2019). The
reason for the application of this strategy for McDonald’s is the fact that the
company need to regain its popularity in the international market since in many of
the countries particularly in Asia, McDonald’s have failed to maintain its dominance
 and had to forfeit its business (Mcdonalds.com 2019). Thus, product-market
strategy can be considered as a joint statement that defines the product line of the
company(Mcdonalds.com 2019).
The application of Ansoff ’s matrix can be done based on four metric points that can
help in the growth of an organization. Each of the four-growth matrixes can help in
understanding a current scenario at the organizations and thus, based on its
understanding of the knowledge products
can be offered at the existing market. For McDonald’s the growth scenario can be th
e offering of products and services so that it can gain its reputation back in the
market and ensure that proper market development takes place. It can increase its
market share and ensure that existing market segments can be identified by the
sale of the products and services.

Figure: Ansoff’s matrix of McDonald’s

From the figure, it can be seen that each of the growth matrix have certain criteria which is
needed to be achieved by the organizations. For McDonald’s it is necessary that the
company apply the reduction of the pricing strategy so that it can ensure market
penetration (Mcdonalds.com 2019). At the same time, it can improve the promotion and
distribution support by the use of social media. As pointed out by Lovelock and Patterson
(2015) these strategies are considered as the least risky growth option that can help in the
development of McDonald’s in the competitive market.

Apart from this, the market development need to be done based on segmentation of the
customers. McDonald’s can segment customers based on choice of proteins such as
people that consume chicken as opposed to the people that prefer beef or pork
(Mcdonalds.com 2019). Hence, development of the market in a foreign place need to be
 done based on the choice of the proteins of the customers. However, as stated by Kotler.
(2016) the risk in this case can be high since for the fulfilment of the new market research
need to be undertaken.

The product development and the diversification can help McDonald’s to ensure that
investment is made in the research and development of additional products
(Mcdonalds.com 2019). For example, if the company is willing to sell desserts, then proper
research need to be made for ensuring satisfaction of the customers along with this,
diversification in the form of potential synergy of the product need to be maintained
(Mcdonalds.com 2019).

9. McDonald’s: "market leader"

The latest surveys on image and brand perception published by independent media place
McDonald's among the top 10 companies in the local market and the absolute leader in its
category.
In the CEOP ranking of "The 200 Most Admired Brands" published by the Clarín
newspaper on 12/12/99, McDonald's appears in 7th place and first among brands in the
fast food service category
The magazine Negocios published in its December edition an image ranking made by the
consulting group Strategic Business Alberto Wilensky entitled "The 100 best companies",
where McDonald's is ranked 8th and the first in its category.
As described by the different categories of the published surveys:
• # 1 in fast food service and unique among the Top 10
• # 1 in General Ranking among Students
• # 1 in Overall Ranking in the "Customer Service" and "Business Ethics" Categories
• # 1 in fast food service and unique among the Top 10
• # 1 Fast food in all categories: Quality of products and / or services, Customer service,
Price policy, Honesty and Transparency, Trajectory.

10. Strategies used:

• Strategies for "global domination":

McDonald in his 1995 annual report proudly announces his "strategies for global
domination." He says McDonald's "vision is to dominate the global food service
industry. Global domination means setting the bar for customer satisfaction while
 increasing market share and profits with its strategies of convenience, value and the
execution ".
• Generic competitive strategies used:
Mc Donald´s applies the same competitive strategy in all countries: being the first on
the market and establishing its brand as soon as possible through intense advertising.
• Total Leadership in Differentiation: "more for the same wreck":
The company tries to differentiate its products and services by creating characteristics
perceived as unique and important by consumers.
Its market share and profits grew due to convenience, value and execution strategies.
McDonald´s also performs value activities in the most efficient way possible in order to
reduce operating costs, thus increasing its benefits.
Alternative strategies used by McDonald´s:
Integration strategies:

Forward integration: as they exercise control over their franchises worldwide.

Backward integration: integrates value chains with that of its suppliers, thus
coordinating their activities and achieving both beneficiaries with it.
Intensive strategies:
Market penetration: since strategies are developed to increase sales, such as
promotional activities, etc.

Strategies for growth:

Execution: its plans are based on the total satisfaction of its consumers, the
treatment of offering more than normal, this is achieved by delivering superior quality,
good service, and constant cleaning. This is the foundation of your growth, and it is an
imperative to capture new opportunities in the future.
Expansion: the company, expanding its products, from the conventional line of
hamburgers constantly, introducing what the public wants, and discarding what the
public dislikes.
Extension: In the long term, the business seeks to continue growing, so it constantly
seeks innovation and the development of new businesses.

11. Business opportunities

 •Mc Donnals has become aware of climate change, correcting the importance
that people give to recycling and obsolete plastic: No more tableware,
welcome paper bags. In this type of business, the use of dishes becomes
unnecessary; And that's why the McDonald brothers will make the decision to start
using paper bags to deliver food. This is without a doubt one of the bases of the
success of the franchise and one of the great contributions that McDonald's has
given to the fast food industry.

 An original company philosophy: McDonald's is a leader and example for many

within the business world. One of the most important contributions McDonald's
takes to the first step in this industry is a unique and consistent business
philosophy. Since its inception, McDonald's operating philosophy has been
concentrated in the following areas: Quality, Service, Cleanliness and Value. It also
has a system of corporate standards, and individual opportunities, that is applied in
a comprehensive way for the optimal operation of all franchises worldwide. In this
way, McDonald's remains a well-oiled machine that has served as an example in
many other restaurants, through an impeccable corporate image.

 They have a magical experience for children: Their restaurants offer a magical
experience for children. McDonald's restaurants in Europe were among the first to
accept families with children. Children are not only welcome, but have become the
franchise's spoiled audience; That's why so much effort is invested in making
restaurants one of the favorite places for the little ones at McDonald's. From the
wonderful playgrounds, to the Happy Little Box and its incredible toys, to the
fantastic characters that give life to the world created for them, McDonald's has
known how to capture and maintain the love and attention of children from the
beginning.

 Focus on your workers: McDonald's is at the top of the "Great Place to Work"
ranking. The principles of Quality, Service and Cleanliness before calls, originate -
of course - from our employees, who are responsible for applying them daily to
work. This is why it has been essential for the success of McDonald's to have
100% trained employees who know, to the letter, what is expected to be achieved
 and how to achieve it. The company has taken care of maintaining its notable
problems through great efforts; such as its internship programs, a system focused
on teamwork and full compliance with the processes that make the company's
mission possible. And even, also relying on McDonald's University, which we have
talked about on other occasions.

 Technological innovations: In 2020 to order a hamburger at McDonald's in

several cities around the world, customers are not required to queue at the counter,
as there are provisions on metal structures, several screens that resemble giant
tablets, where they can see the menus, read the descriptions and prices, select
what you want to pay with cash or card in these types of tablets ATMs. This occurs
in countries such as the United States, Japan, China, Korea, Brazil, Argentina, and
Uruguay, and in Mexico. Ordering through a screen is part of "Experience of the
future", a global strategy of the fast food chain, which includes equipping stores
with technologies to make service more agile and stay fun. McDonald's also wants
to make it easier for customers to personalize their orders and make more home
deliveries with the use of apps.

12. Kind of leadership develops the staff of the McDonald's company

Mc Donalds continually motivates its workers with the intention that they feel identified with
the company and give the best of themselves in their jobs. Many studies reveal that
motivation influences a lot when developing a leader and this is something that Mc
Donalds considers and has taken into account.

We define as motivation the ability of the company to create an environment in which

employees can and have the possibility of expressing these responses that can and work
to achieve compliance with the goals of the company. It is important or essential that the
goals of the company are considered identical or similar to human needs.
Motivation at McDonald
• Promote everything that is for young people, give them life insurance and paint
everything as if it were going to be perfect
• Satisfy employees through parties and social things without money
• It offers flexible hours since its employees are university students and the salaries are
not much for the simple reason that they do not have a family to support.
Types of motivation that the company uses with its employees to control their
leadership
• Motivation for achievement: Recognition is a fundamental part of the company's
policies since this plan generates the "employee of the month", in which incentives are
given to the employees who stand out the most during the month. That is why it is
common to find in each of the McDonald’s restaurants a box that says “Employee or
Crew of the month” and a photo of the selected one.
• Motivation for affiliation: Also, employees are trained in such a way that they can
perform a multiplicity of work. One of the benefits for the comfort of the workers is the
employee room which they have in all McDonald's restaurants where they can rest and
eat as they please in the time stipulated for it.
• Motivation for the competition: the promotion possibilities allow the employee to grow
within the organization and due to their achievements many are promoted to a job. To
ensure that employees are able to carry out their work optimally, the company carries
out a Training program. This program is made up of: courses and workshops with a
complete audiovisual equipment, brochures and manuals which have all the information
necessary for employees to successfully meet their needs.
• Motivation for power: the possibilities of promotion allow the employee to grow within
the organization and for their achievements many are promoted to positions. To ensure
that employees are able to carry out their work optimally.
Leadership
It consists of the ability or process by means of which the leader of the company is able
to influence others in order to achieve the objectives and satisfy the needs of the
company. It seeks to develop the maximum potential in companies and workers. For
this reason, companies no longer only need bosses but also leaders.
• Transactional Leadership: Mc Donalds is responsible for awarding each month to the
members of their teams that they include among others for their performance.
Indeed, the "employee of the month" distinction that is released to the public at each
of its fast food places is a clear example of a transactional leader. It is a type of
leadership that, with a view to a specific goal, motivates economically and / or
morally employees to achieve it. How? Rewarding those who strive for it and, in
return, "punishing" or not promoting those who do not align with business objectives
• Transformational leadership: Mc Donalds trains its employees constantly and thanks
to its motivations to the employees who form a link with the company.
13. Consumer characteristics where the company has not successfully penetrated
According to National Public Radio (NPR), the hamburger giant will open its first
vegetarian store in India in 2013 near the Golden Temple, a holy place of pilgrimage for
the religion if it is located in the city of Amritsar in the north of the country. McDonald’s is
not, however, a pioneer in adapting its product to the needs of this Asian country.
Domino’s pizza has had stores selling vegetable pizzas in the country for some time and
the Metro chain also sells vegetable sandwiches in the Indian state of Punjab.
And it is that in the country about 40% of the population avoids the consumption of meat,
according to data from the FAO, the United Nations Food and Agriculture Organization.
Keep in mind that cows are a sacred animal for Hindus and that Muslims do not eat pork,
so chicken is the only type of meat consumed by part of the population.
The chain explains on its Indian portal that vegetarian and non-vegetarian specialties are
processed separately and with different personnel to avoid contamination to "meet
expectations controls".
McDonald's already had a 50% vegetarian menu in India, according to Yahoo News. For
28 rupees (0.40 euros), his McAloo Tikki burger, which uses a mixture based on spicy
potato chips, is the most sold and represents 25% of the chain's total sales in this country.
The substitute for the Big Mac, which it offers is the Maharaja Mac, a chicken meat base.
The company is planning to open another vegetarian establishment near the Vaishno Devi
cave sanctuary in Kashmir, a Hindu pilgrimage site that attracts hundreds of miles of
visitors a year.

14. What went wrong in implementing market penetration?

Cultural Food Dilemma
This is a case where cultural differences vary the course of business, although doctors are
successful in most countries with their traditional products, in order to penetrate into
homes the success rates that they have to know very well their rules and customs. and
emotions. It is possible that the company has achieved a cultural change in India since it is
not a traditional Indian restaurant but rather a fast food restaurant, but that does not mean
that because customers open up to this style of food, they leave behind their deep-rooted
customs of traditions and religion. . It is evident that no aspect can be minimized when it
comes to religious principles, since this largely depends on the success or failure of a
commercial project in a country.
The opening of the new branch of the franchise in India, does not consider the culture of
the people of this country where they profess the Hinduism that considers the cow as a
sacred animal being this the religion of 80% of the population of India. Its supporters
believe that the animal embodies values such as altruism and non-violence. After all, the
cow gives a lot of itself, like milk and leather. A change, receives very little: grass and
water.
As Hindus they worship the animal, which is worshiped at some festivals and of course
they do not eat its meat. The strange thing is that India is the largest meat exporter in the
world. In large part this paradox is explained by the fact that India also produces,
consumes and exports buffalo meat. One in two buffaloes in the world lives there. For
Hindus, buffalo do not fall into the category of cows and can therefore be killed and eaten.
However, large quantities of beef are illegally entered into export containers. So much so
that there is a government program to install laboratories in ports to test the origin of meat.
The cow acquired sacred status only in 400 AD. More recently, Hindu nationalist groups
such as the Bharatiya Janata Party (BJP) have reinforced the idea that killing cows is a
crime. India's Prime Minister Narendra Modi is the BJP and there is a project to create a
Cow Ministry to protect them.
In India, from time to time, there are cases of lynching of people, mostly Muslims, accused
of eating beef. In September 2015, an Islamic man died in the state of Uttar Pradesh killed
by a mob who accused him of eating meat. Incredibly, the forensic analysis showed that
he had eaten sheep meat.
The BJP is so fanatical that a state research institute has registered twelve patents for the
medicinal use of cow urine. They believe that urine can be used to treat various problems,
such as diabetes, infections, and even cancer. This type of therapy is mentioned in
Ayurvedic medicine texts. But the BJP obviously does not represent all Hindus. In the big
cities, Hindus eat hamburgers without conscience problems. Approximately 2% of income
admitted eating meat. It seems little, but represents about 12 million carnivorous Hindus.

Action plan to propose solutions and carry them out successfully

Considering that eating beef is a serious sin in this country, and eating pork is a Muslim
sin, McDonald's responded to this food dilemma with menu changes, chicken and lamb
were the most suitable options. And without forgetting vegetarians, all menus are divided
into carnivores and vegetarians.
The company should:
• Prepare a complete and in-depth study of the customs and traditions of its clients.
• Carefully review the components of the ingredients used in meal preparations.
• Formulate possible problems that may arise due to cultural norm limitations in a
foreign country.

A. Purpose of the study

Carrying out a case study like Mc Donnals is of fundamental importance to us as
business students, as understanding how you make a mistake in an international
franchise shows that you may have the resources to do market research that avoids
cultural cultures. that directly affect the business as the one described in this study is
possible, we only have to analyze cases like this to avoid the same mistakes in the
future when we are in charge of a company.
B. Reflection questions
• What led a franchise like Mc Donnalds with so many resources and preparation in
international markets not to consider the culture of their new target market?
• What changes had to change to the presentation of the menu and the concept of the
brand for the Indian society to end up accepting them?
• What is the importance of doing a correct market analysis and having the profile of the
consumer when trying to enter a new market?
• With a fast food franchise that is dedicated to a food vendor based on beef, a sacred
animal and unthinkable to eat in a country of Muslim and religious culture, how can you
succeed and recover from the resounding failure that was initially?
C. Analysis unit

 The Mc Donnalds fast food franchise

 Indian culture and its consumer profile
D. Methods
A bibliographic analysis of the case was carried out taking into account news, previous
studies and other bibliography about the case of a failed attempt to internationalize the
Mc Donnals fast food franchise, in the same way as the profile of the Indian consumer
explaining why it failed in first instance and then how the company was able to position
itself and find its niche.
E. Conclusions
 McDonald´s is a multinational company that is characterized by being molded to the 100%
culture in which it will penetrate.
 Penetrates By entering the country little by little, most of the activities of the new
suppliers are carried out to supply them.
  They know how to respond critically to marketing and are molded according to what the
marking requires.
  When there is a problem against them, instead of defending themselves, they look for
ways to change that aspect to always remain a leading company.
  They look first for their place to be dressed for the first time and then a campaign is
carried out to attract customer loyalty.