McDonald’

s
corporation

I’m Lovin’ It
 McDonald’s and the globe
• McDonald’s is an American food chain company that was founded in 1940
as a small restaurant.
• Since then, McDonald's is the world's largest restaurant chain by revenue,
serving over 69 million customers daily in over 100 countries in more than
40.000 outlets as of 2021.
• In a few countries, McDonald’s was not successful because of various
circumstances and Barriers.
• One such country is Iceland where McDonald’s left the market in 2008
after a financial crash.

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Barriers for
McDonald’s to enter
in Iceland market.
Lack of product Customization- The basic reason that McDonald’s failed in Iceland was they presented their
product as it is in Iceland without any customization. As it originated in the United States and came to Iceland with
same varieties and they made a lot of efforts to promote their American burgers to capture Iceland’s market which
didn’t work.

Weather- Its products are known for their taste and due to the hard weather in Iceland they might have faced
difficulties for raw materials, and ingredients and struggled a lot for the same and ended up with high costs.
Unpredictable weather like snowfall, hail, rain, sun, and wind within one day makes it hard to perform the same as
other countries.

Labor: Iceland is expensive and some products and services are overpriced even labor and apartment
rentals. McDonald’s requires skilled workers to maintain their taste, cleanliness, and services at their
restaurants, which ultimately cost them high and added on in product prices, eventually negatively
affecting the business.
Logistics- This whole island is connected with roads but it’s quite difficult to transfer your raw material from one
location to another because here you may feel a lack of connection with your neighboring countries or within the
country. Their transport rules and roads make it difficult and have heavy tariffs as well.

Competitors- In Iceland, it was difficult for McDonald’s to create market demand for their product against
competitors like Tommy’s burger joint which was there for a long and captured Iceland as a whole, In the early
stage, Mac’d had some sort of enthusiasm in public but after some time it was disappeared as they opened around
4 branches in 1993.

Legal restrictions- As Iceland is an island where you can’t grow food and ingredients for your products
importing agricultural products to Iceland was 24 % which was reduced to 11% in 2018 but an import from the U.S
nearby 20%. Its basic import was from Germany but in crisis, there was a sudden rise in prices of raw materials.

Exchange Rates- It plays a critical role as it will affect the value of money. It can be clearly seen that the currency
value of Iceland changes very frequently in the last decades which affects the purchasing power of money.

Internal management problems- At the time of the Crisis, Macdonald’s company was highly indebted with
foreign currencies when they bankrupt which was the result of wrong management decisions regarding finance.
Strategies to overcome in future
Setting up basic infrastructure: They can install their own machinery and infrastructure and storage so that they can
produce their own basic material at the local level which will be less costly than importing the same from other countries and
maintaining hygiene standards to retain the trust of the customers.

Marketing information management: They can also update themselves according to the Iceland market and keep
changing their product menu and also use marketing channels that are used by their competitors for a long time.

Focus on marketplaces: Another way is finding the best locations in Iceland according to the demands like they can open
more branches as those locations where visitors are there for their vacations or places that can be easily accessible by the
customers in a short period of time.

Change in marketing strategy: Every market has its own trends so they have to change its marketing strategy to boost
its sales in Iceland’s market because there are people around 5 million and 3 million tourists who visit yearly. So have to
focus on both equally to increase their profits.
Utilize internal resources: To minimize their overall costs like importing raw materials and avoid taxation on
these imports, they can follow the market research to find out basic ingredients or customize their product
according to the customer by utilizing internal sources which are available in the market with low cost. In this way
they can reduce the overall cost of their products and customers can prefer according to their pockets.

Financing: To avoid previous mistakes like they have done investments from banks in their own country and
because of the crisis they closed their branches in Iceland. So they can finance their business with equity and debt
equally and involve internal market players who are already working well in the Iceland market.

Government incentives: They can take advantage of Iceland’s government incentives which have been
launched by their government to enhance international business from different courtiers and Levying low
corporate taxes in Iceland within the whole of Europe.

Promotions: MacDonald already has great enthusiasm in customers for their products. On the first launch of
the MacDonalds branch in its capital, Prime Minister Davio odds-on visited there for had the first bite of the
MacDonalds product. They just have to focus on promotions while keep changing their offers to maintain their
hype in the market.

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THANK YOU

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Bhawna- 4438771

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