This trend affirms the notion that McDonald often opens more outlets in markets

that it’s already operating in, but more importantly, it is crucial to note that the
company also enters into markets which have a higher Gross Domestic Product
(GDP) and a higher per capita GDP

This when analyzed according to the economic theory, we observe that

McDonald increase its outlets by first sampling the market characteristics of the
area, and also at a given point in its growth phase, it considers the all important
expansion attribute of factoring in the incremental costs associated with
expansion (Lafontaine, 2004, p. 17).

This fact exposes another characteristic of McDonald with regard to its

international strategy because it is clearly evident that the company is very slow
in diffusing its operations to international markets, thereby prompting it to plays
some sort of catch up game to its competitors, since its primary driver for growth
is the overall desirability of the market (according to its history of operation in the
market), as opposed to the growth of the market in the long run.

Indeed, McDonald is extensively attracted by higher market potentials in certain

markets (and the apparent increase in population) because according to the
company, a higher GDP would imply a similar culture to the America market, but
interestingly, higher tax rates seems to increase the likelihood of entry for the
company as well (McDonald, 2010, p. 8).

It is also very interesting to note that McDonald rarely considers certain risks to
international trade such as currency fluctuation, political instability or Henesz, but
in the same context it is not moved by competitive pressures in new markets
(Lafontaine, 2004, p. 17). In this regard, McDonald is seen as probably among
the first companies to enter unexplored markets while other competitors such as
Burger king or Wendy’s operate in markets which seem generally fair for trade
(Lafontaine, 2004, p. 17).

Another notable feature of McDonald’s operations in its international markets is

that, it offers Wi-Fi systems and iPod rental services; a strategy that has not only
been identified to dilute the company’s brand equity, but also alienates the
company from its core business competency. For example, when the company
installs the Wi-Fi music systems, it implies that it doesn’t need fast food
customers because fast food customers don’t need to listen to music.

From these developments, McDonald’s European customers no longer expect to

find American foods at McDonald’s and neither do they look forward to finding a
fast food environment in the restaurants. Even though the company seeks to
maintain its profit level in the short run, such a strategy is bound to be disastrous
for the company in future.
This is true because as the company seeks to modify its new outlets to suit local
preferences, it is alienating itself from being perceived as a truly global brand
because it is moving further away from the identity that made it rise into a global
brand in the first place (Aswathappa, 2008, p. 319).

For instance, in Argentina, the company serves McNiffica instead of the Big
Mac which is popular in its American outlets; in Japan, the company serves an
equivalent of McTeryavki;but in India, the company never serves beef in its
burgers (because of the cultural makeup of the Indian society); however, in
countries where chicken is too expensive, the company serves Veggie
McNuggets which can be equated to the popular C in America (McDonald, 2010,
p. 20).

Market adaptation in China

Unlike in Western cultures, where meals are served on different plates for
different individuals, the Chinese value communalism even during the meal
times. Meals are usually served on a single plate from which individuals take
food using their chopsticks. In order to succeed in the Chinese market, the
McDonald’s Corporation decided to adopt the Chinese style of serving food and
this is one of the reasons why the Chinese have grown fond of the fast food giant
(Ordo, 2001).

In addition to the style of serving food, the McDonald’s restaurants in China

uphold the Chinese cultural value of social relations. China is indeed a social-
oriented society. Social gatherings are common and extend over a long period of
time. Unlike in the United States where the concept of fast food and eating out is
mainly for convenience purpose, it is totally different in China.

McDonald’s Corporation blends well into the Chinese culture. All McDonald’s
restaurants in China are decorated as to symbolize traditional Chinese culture.
The restaurants also change their interior designs to match with different
festivals. For instance, during the Chinese Lumar Year, they use art-red paper
cut-outs of Chinese characters and pictures of auspicious symbols. They also
prepare special meals for such occasions.

In China, there is a general preference for chicken over beef (Ko, 2008). As a
result, the company created a menu with a wide variety of chicken-based foods
such as chicken burgers and chicken wings. In addition, the Chinese traditional
foods such as red bean pies and seafood soup have been added to the menu.
The company has also taken into account the high demand for teriyaki burger
and has incorporated it into its menu in China (Namita, 2000).

The management approach of McDonald’s in China is also different from the one
used in the United States. In China, the McDonald’s restaurants are managed by
the locals. This is one of the reasons why the company has succeeded in China
and yet many large Western-based corporations have failed. Inviting locals to
manage the restaurants has enabled McDonald’s corporation to overcome most
of the challenges that arise in organizations with cross-cultural employees and
managers.

Personal satisfaction is therefore the ultimate goal of every worker. In China, on

the other hand, people work as a close-knit family, with consideration of each
other’s feelings and progress. Personal satisfaction is therefore frowned upon
and may be misconceived as selfishness.

As a result, potential conflicts that could arise have been avoided. Moreover,
because the managers are Chinese, they are able to provide the clientele with
the services that appeal to them better because they understand their culture
well. The responsiveness of McDonald’s to the national culture of the Chinese
people is one of the forces behind its enormous success (Macduff, I2006).

Use of local ingredients

!!! The corporation also has joint ventures with well-established Chinese firms
and organizations, for instance, the state-owned General Corporation of Beijing
Agriculture, Industry and Commerce. It also has a network of local farmers, food-
processing manufacturers and other suppliers, that helped the company in
developing a specialized infrastructure which was once non-existent.

In China, McDonald’s mode of operation is mainly joint ventures with local

companies or wholly-owned enterprises (Ko, 2008). Even after the Chinese
government amended its franchise law, the corporation has been reluctant
towards the franchise mode of operation due to fears of franchisees learning its
trade secrets and menus, and then opening stores under different brands.

By the year 2007, only one out of more than 800 of its restaurants in China was
franchised. The corporation, however, has focused more on improving the quality
of its products and management control.

Indeed, by 2007, KFC had outlets in all provinces except Tibet (Liu, 2008)
whereas McDonald’s still had no presence in six provinces. In order to compete
with KFC, McDonald’s used a different approach. Rather than focusing on
increasing the number of outlets in all provinces, McDonald’s uses strategies
such as drive-through restaurants and twenty-four-hour services.
 Taking this cue, McDonald’s opened the first of a series of drive-through
restaurants in 2002 by partnering with Sinopec, China’s largest petrol retailer.
By 2007, almost fifty percent of its restaurants were running round the clock (Ko,
2008).

Use of modern technologies and home delivery services

Tier pricing

Despite its rapid economic growth, the distribution of income and wealth in China
is very uneven. In China, foreign-owned restaurants are more expensive than
local restaurants thereby restricting the clients to only the middle- and high-
income earners. In order to cater for the needs of the low-income earners,
McDonald’s introduced a tier pricing system in which the products were sold at
different prices according to customers’ purchasing power.

The corporation achieved this by dividing the country into different districts
depending on their average levels of income and then adjusting the prices in
each of these districts to match the income levels. This pro-poor strategy has
also increased McDonald’s popularity in China (Ko, 2008).

Notwithstanding its success, McDonald’s greatest rival, the Kentucky Fried

Chicken, is way ahead of McDonald’s in terms of its presence in the provinces
and number of outlets.

Five super general steps of international market entry potential evaluation

data on population, GDP per capita,

The level of competition

Legal and political environment

The influence of socio-cultural factors

estimated amount of direct and hidden costs

With "global thinking of local action", the global regional structure gives department managers autonomy to make
quick decisions based on local tastes and rules, so that The company can meet the needs of each country more. In
addition, the company gained valuable experience by satisfying local tastes and building a strong competitive
advantage. As in different regions, Mcdonal’s has different marketing ways to bring its image to customers.
McDonald entered the Vietnamese market by developing a developmental licensee for a company in Vietnam, Good
Day Hospitality
Список источников

https://ivypanda.com/essays/international-business-5/

Lafontaine, F. (2004) Beyond Entry: Examining McDonald’s Expansion in

International Markets. Michigan: University of Michigan.

https://myassignmenthelp.info/assignments/international-marketing-assignment-global-
market-entry-strategies-mcdonalds/

and a couple of downloaded docs