Globalization Strategy of McDonald's Corporation
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Case Code: BSTR310 Case Length: 22 Pages Period: 2000-2008 Pub Date: 2009 Teaching Note: Not Available |
Price: Rs.400 Organization: McDonald's Corporation Industry: Fast-food Countries: Global; USA Themes: Globalization, Standardization, Localization, Cultural Issues |
Abstract Case Intro 1 Case Intro 2 Excerpts
"McDonald's global presence is as strong now as it ever has been and people all over the world are becoming more accustomed to eating McDonald's fast and inexpensive meals on the go."
-Ockham Research, in 2008.
"McDonald's international operations continued to grow at a brisk rate, helping to insulate the company from the housing-led US economic downturn that is hurting upscale restaurants."
-Financial Express, in 2008.
"The world is becoming a service society. People are hungry for service, but in many countries they don't get any except at McDonald's. That's why our stores are so crowded. That's why we're ahead."
-Rolf Kreiner, ex-Head of marketing at McDonald's Germany Operation, in 1994.
Untouched by Global Economic Slowdown
In July 2008, US-based McDonald's Corporation (McDonald's), one of the world's leading fast food restaurant chains, reported a net income of US$ 1.19 billion for the second quarter of the year 2008. This stood in sharp contrast to the corresponding quarter of the previous year when it had suffered a net loss of US$ 711.7 million.
The company said that the sales had largely been achieved due to brisk business in its international markets. It also reported a rise of four percent in revenues, which stood at US$ 6.04 billion, backed by 6.1 % growth in same-store sales at the global level, while the comparable sales in the US grew by 3.4 %. The history of McDonald's dates back to the late 1930s, when two brothers Richard McDonald (Richard) and Maurice McDonald (Maurice) started a hot dog stand in California. In 1961, the McDonald brothers sold off their business to Raymond Kroc (Kroc), who was managing the franchise operations at McDonald's. The company reached new heights in terms of growth under Kroc's leadership.
In 1967, McDonald's first ventured out into the international market by starting a store in Canada. This was followed by the setting up of more restaurants in Europe and Asia. Although most of the operations were standardized, the company also took the route of localization to gain acceptance in different countries. Some of the localization strategies used included adding local items to its menu and deleting from it certain food items that were objectional in some places. The company also undertook different marketing techniques in different countries and adjusted the pricing according to the prevailing economic conditions there. As of 2008, McDonald's was present in around 121 countries across the world...
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