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Case Details |
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Case Code: BENV034
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| Case Length: 16 Pages |
| Period: 2008-2016 |
| Pub Date: 2017 |
| Teaching Note: Available |
| Price:Rs.500 |
| Organization : McDonald’s |
Industry : Restaurants
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| Countries : China |
| Themes: Exit Strategy |
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McDonald’s in China – Shifting Fortunes of the World’s Biggest Fast-food Chain |
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INTRODUCTION |
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On December 02, 2016, in a US$ 3 billion deal, a team led by Chinese conglomerate Citic Group and US-based private equity house Carlyle, agreed to buy the Chinese operations of US-based fast food chain McDonald’s.
McDonald’s entered China in 1990 with its first restaurant in Shenzhen . It became a symbol of the modern lifestyle in the country. Though it remained American in terms of menu, services, and management, the company brought in variations in its products and ingredients to suit the Chinese palate and culture.
In the 1990s, when McDonald’s entered the country, it was the first contact with Western food for the Chinese. McDonald’s offerings were considered to be gourmet fare in China, whereas in the US, McDonald’s was synonymous with cheap fast food. The prices in China were high, and the Chinese consumers considered dining at McDonald’s a classy and upmarket affair.
It expanded steadily in the country. For McDonald’s, other than its home market, the US, China was the largest growth market with 960 restaurants and over 60,000 employees as of 2008. It was the second largest player in the Chinese fast food market, behind another US-based company Yum Brands (KFC and Pizza Hut)
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