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Global Business: A RESEARCH STUDY Of Mcdonalds

This chapter begins by giving general background of the business. It goes on by outlining the seeks and purpose of study along with strategy and strategy used to comprehend global business and the strategies used in concerned organization.

McDonald's is one of the leading restaurant chains in the world. The business commenced in 1940, when two brothers Dick and Macintosh personal computer McDonald in San Bernardino, California open up a restaurant. That they had launched "speedee Service System" in 1948 that was their one of the guidelines of the modern junk food restaurant. Before that, it was a Bar-B-Que restaurant which brothers had open up in California. McDonald has already established been famous because of its HAM BURGERS. As per

the information of the McDonald's background, real money has generated from sales of hamburgers, which got sold at nominal price of 15 cents. The restaurant gradually become famous and the brothers get started franchising their restaurant in the entire year 1953. Later in 1961 the Hamburger College or university was exposed, which gave away McDonald's restaurant Bachelor of Hamburgology levels to students. In 1963, the mascot Ronald McDonald was created as part of a online marketing strategy in US. Considering the huge success and brand McDonald's has become, the food chain is spread around the world in virtually all the major metropolitan areas of the world. Being economical and user friendly, the success rate of the company cannot be doubted.

1. 2 Facts and Figures

These fact is from McDonald's new term "Travel Trough Time AROUND!" Source: www. aboutmcdonalds. com/mcd/our_commpany/mcd_history. html

These facts have written below day wise from 1940 to 2009.

Note: Only the important facts of the company are got into.

In 1940, Dick and Mac pc McDonald open up McDonald's Bar-B-Que restaurant on Fourteenth and E Roadways in San Bernardino, California. It really is an average drive-in featuring a huge menu and carhop service.

In 1948, Brothers turn off their restaurant for alterations. 90 days later, it reopens as a self-service drive-in restaurant. The menu is reduced to nine items: hamburger, cheeseburger, soft drinks, milk, coffee, potato chips and a slice of pie. The staple of the menu is the 15-cent hamburger.

In 1954, Multimixer salesperson Ray Kroc trips McDonald's in San Bernardino intending to sell the brothers more Multimixers. The 52-year-old Kroc was fascinated by the operation.

In 1959, McDonald's has completed its opening of 100 Restaurant.

In 1965, McDonald's celebrates its 10th wedding anniversary with the first general population stock offering at $22. 50 per show.

In 1967, The first international McDonald's restaurants available in Canada and Puerto Rico. Today McDonald's restaurants are in 119 countries around the world.

In 1980, In 1980, McDonald has celebrated its 25th wedding anniversary in the period of 1967 to 1980 in-between McDonald's acquired released some new selections and indoor sitting restaurants on earth.

In 1996, McDonald's had launched its first website McDonalds. com it was a commercial web page.

In 2005, In 2005 50th wedding anniversary of McDonald's was celebrate in the world

In 2009, Today McDonald's is becoming world largest fast food chain it has made so many changes and has created new selections and service styles.

1. 3 Concentrate on Market

McDonald's main goal is to focus all sorts of customer. Its marketplace is for everybody in community all over the world. From vegetarian to non-vegetarian

McDonald's define its marketplace using term portion of demography. The sections of the demography are; family life cycles, age, Nationality, Income, Technology etc. Although McDonald's provide good quality food at low prices, they have introduced a new slogan for McDonald's "you can find McDonald's for everyone"

1. 4 Aims and Reason for Study

The reason for this review is to analyse the strategies, that happen to be being used in McDonald's. Furthermore, I will look at environmental factors influencing McDonald's business across the world. All of the analyses will make on the bases of information provided in project material. This research will create a deeper knowledge of making analytical decisions, planning effectively, and about strategies, which businesses use when they broaden their business globally.

1. 5 Approach/ Strategy/ Theoretical Framework

1. 5. 1 Research Approach

With this research, I will seek to understand the way the environmental factors impact McDonald's business and what strategies McDonald's use to cope with it. McDonald's is a multinational US company with 1700 restaurants in about 120 countries on earth. What distinguishes a case study is its focus on environ-mental factors and strategies. With this research study, one can also consider things at length when you are given higher opportunities to go deeper and find out things that might not need been obvious at a far more superficial research. Further, I've chosen to produce a qualitative research but also a limited quantitative research. The primary part of the case study based on the questions asked in given material. These questions will answer on qualitative research basis.

1. 5. 2 A Qualitative Research

A qualitative methodology means that the authors looks after people, configurations and groups in a way that will not reduce them into statistics or factors (Taylor & Bogdan, 1984). Qualitative research can be involved with collecting and studying information in as much forms, mainly non-numeric, as you can. They are descriptions that's fits in this approach used when performing the research within this newspaper since my analysis involves qualitative data collected from one side books and research that has already been made in this particular field. I've experienced both benefits and drawbacks with utilizing a qualitative method in this research. The positive aspect is that I have already been able to understand my subject matter deeply. I've also experienced that I have already been in a position to control that we understand things right. The downsides that I have experience during this case study that my total reliance on the given material was not enough to complete this analysis. The qualitative method also supposed that I possibly could not generalize my results to the same scope as one could have done with a quantitative research.

1. 5. 3 Books Review

The literature I have found in this analysis mainly purchased from internet. I have used many sources in various forms such as books, E-books and some of the articles. Furthermore, data provided by the module innovator has helped me to get deeper kn-owldge about subject matter. One of the advantage-using internets is they have current data than regular literature. A large part of the material reviewed hasn't directly found in the analysis. However, it includes provided more standard knowledge within the topic. I have used both main and secondary sources. Nevertheless, in almost all primary sources has used. As I've mentioned above my selection process was conducted in a very through way since it is important to critically review and examine supplementary data. I consequently got the ambition throughout the work with this research that I sought out a broad literature base as you can in order to provide several authors point of view after the given concerns.

Question No. 1

Discuss the environmental factors affecting after McDonald's putting emphases on the key drivers?

However, McDonalds is a multinational firm that does business throughout the world. It faces environmental factors through the process of internationalizing the business enterprise. These factors include interior and exterior factors, SWOT analyses as well as Infestations analyses. Globalization has made global considerably smaller. Says lines have turned into pretty much a divider separating certain parts of a massive unitary community. Companies are the the one which are highly influenced by this occurrence. The next annotations and propositions used in the following discussions should be supported by boasts on publications ands academic items that address international development strategies and international marketing theories.

2. Internal and Exterior Factors

Three factors were chosen to summarize the success of McDonald's corporation. The first factor is globalization, which is define as nearer contact between different parts of the world, with increasing possibilities of personal exchange, common understanding and a friendly relationship between world citizen. Diversity, the difference between people and culture is the second factor. The ultimate factor is ethics, that can be defined as a set of ideas of right conduct.

2. 1 Globalization

Today, companies and companies are widening their business in the global market. Globalization is necessary for success and survival in the worldwide market. However, it isn't easy to do competition global market and make business successful there. As a respected junk food service shop, McDonald's joins best multinational companies with restaurants in 120 countries. Important strategic decisions are a key factor to their success with thought for both inside and exterior factors. When considering the overseas market, companies need to consider there are hazards. There should be local marketing to appeal to the local consumers and to build associations and trust.

Therefore, the proper planning marketing must be effective. McDonald's caters its menu in other countries to the culture of the locations. For instance in India beef is not use in non-vegetarian menu, because beef regarded as sacred. Global marketing decisions aren't different from those made domestica-lly however the decisions are to unique to each country. Furthermore, working on a worldwide level allows a company's employees to experience working in various cultural environment. That is a global marketing strategy for recruiting employ-ees. McDonald's has a worldwide core curriculum for its restaurant management.

2. 2 Diversity

McDonald's dedication to diversity is made on the foundational notion that diversity is not just a moral and moral issue, but also a business concern. Because of global expanse of McDonald's business, variety has become a fundamental element of the inner company culture. McDonald's has almost over 30000 restaurants in the world that means franchise, operators, employees, and customers signify almost every culture, religion or ethnicity on earth. In addition, McDonald's promotes the utilization of local suppliers and based on their insurance policies of diversity, needs and keeps suppliers which may have a similar variety culture. Knowing and understanding the neighborhood customs and traditions of the neighborhoods where McDon-ald's has establish businesses, integrating people from these communities into the company, and adapting locally to the tastes and cuisines of the city, has made McDonald's the leader in their industry.

McDonald's realizes that diversity as an asset greatly improves the success of the company. Diversity is a direct representation of company's interpersonal relation-ships. These human relationships, if positive, bring about a rewarding endeavor. Conversely, if the romantic relationships are negative, the business's morale declines of course, if not addressed, leads to the deterioration of the company. This deterioration straight affects the company's income and the community's popularity of the business.

2. 3 Ethics

McDonald's success built on the building blocks of personal and professional integrity. Right from the start, McDonald's has established its reputation on trust and stability, and their determination to the city made them a household name. Creator Ray Kroc, thought in presenting something back again to the community in order to make the world an improved place. McDonald's has always behaved ethically on the planet giving them good customer service.

Throughout the 1970's McDonald's get involved with a lot of charity work. In 1974 set up a charity called Ronald McDonald house. The purpose of this program was to provide short-term enclosure for the groups of seriously ill children obtaining treatment at nearby hospitals. In addition with their community involvement, McDonald's has a long-standing dedication to environmental protection. Restu-rant across the world has impressive programs for recycling, learning resource conservation, and waste reduction. Environmentally friendly achievements of the company have been acknowledged by organizations like the Audubon Modern culture.


According to Ellis and Williams, (1995) The Infestations analysis covers the main element aspects of the exterior business environment that will have an impact on operational performance in a new market entry. The term PEST stands for, political, economical, sociological, and technological factors. In a new market examination, these features are difficult to ignore given that they will effect the business. The combined factors in the Infestation analysis give a summary of the travelling pushes in the macro environment. The purpose of the following examination is to display how they'll interfere with the organization or the industry. Only looking into the macro environment of a market will never be sufficient to produce a decision on whether to enter into market or not, thus additional information is required. The company also offers to look into the condition of the precise industry and the precise requirements of their customers and competition.

3. 1 Politics Factors

The international operations of McDonald's are highly inspired by the average person state insurance policies enforced by each federal. For instance, there are specific groups in Europe and america that clamour for talk about actions pertaining to the health implications of eating junk food. They have mentioned that damaging elements like cholesterol and negative affects like overweight are attributable to consuming junk food products. McDonald's always must face policies of each country through the process of growing its business in different countries. McDonald's has to comply with local regulations and customs and the procedures created by the worried country.

3. 2 Economic Factors

Organizations in the junk food industry are not excused from any disputes and troubles. Specifically, they certainly have their specific concerns involving economical factors. Branches and franchises of fast food chains like McDonald's has the tendency to experience hardship in situations where the market of the particular states is hit by inflation and changes in the exchange rates. The customers consequently are faced with statement of going over their individual finances whether they should consume more on these overseas fast food chains. Hence, these chains may have to endure the problems of the consequences of the financial environment. Specifically, their problem is determined by the response of the consumers on processes and how it affects their standard sales. In regarding the operations of the business, food chains like McDonald's tend to import much of their raw materials into a particular territory when there is a fatality of supply. Exchange rare fluctuations will also play a substantial role in the procedures of the business.

3. 3 Social Factors

The multifaceted character of business nowadays has reflected in the tough significance of the knowledge on the subject of the existing market. This procedure is essentially identified in the field as general market trends. Information concerning the charm and potential domains of the market doubles as obstructions to the success of the business if this area of the operations have neglected.

McDonald's establish a good system in identifying the needs of the marketplace. The company uses principles of consumer's behaviour product personality and purchasing decisions to its edge. Articles on the international strategies of McDonald's seem to be to operate on several domains to guarantee profitable returns for the organization. Organization enhances on establishing a positive mind-set from their core customers. It has also been noticed that the business has given the markets such as UK, an option related to their dinner needs.

3. 4 Technological Factors

McDonald's generates a demand for their products. The business's key tool for marketing is through television advertisements. There are similarly some boasts that McDonald's tend to interest the younger populations more. The lifetime of play areas as well as toys and games in meals offered by the business shows this actuality. Other demonstrations of such a marketing strategy is apparent in the commercials of they use. They utilize animate depictions of these people like Grimace and Hmburglar. Other advertising functions employ popular celebrities to promote their products. The like Justin Timberlake has become endorsers for McDonald's worldwide "I am lovin it".


SWOT is a common tactical tool used to conclude or identify a company's key internal talents and weaknesses, along with external threats and opportunities. The S-W-O-T framework produces a good overview of the organization's position, strategy or planed business activity, and can be used in all forms of decision-making (Chapman, 2004). While some authors express SWOT as an analytical tool, other considers it as useful instrument to summarise results found in past analyses, such as pest research or competitor evaluation. When SWOT was developed in 1960, the motive was to describe why companies tactical planning failed. However, the SWOT progressed and it is now commonly found in the research of companies, companies and even countries.

4. 1 Strength

McDonald's has built up huge brand collateral. It is the No. 1 fast-food company by sales, with an increase of than 30, 000 restaurants offering burgers and fries in almost 120 countries. Sales, 2007 (11, 4009 million), 5. 6% sales growth.

Good creativity and product development. It regularly innovates to preserve cus-tomers in the business.

The McDonald's brand offers consumers choice, fair value and great service.

Large amounts of investment have eliminated into helping its franchise network, 75% of stores are franchises.

Loyal staff and strong management team.

4. 2 Weaknesses

Core product line, keeping in mind the pattern of healthier life styles for men and women and children. Product line mainly centered towards hot food and burgers.


Quality issues over the franchise network

4. 3 Opportunities

Joint projects with merchants (e. g. supermarkets).

Consolidation of sellers likely, so better locations for franchisees.

Respond to sociable changes by creativity within much healthier lifestyle foods. Its transfer to hot baguettes and much healthier snacks (berries) has recognized its new positioning.

Use of CRM, database marketing to more accurately market to its consumer target groups. It might identify likely customers (predicated on modelling and information of purchasers) and stop brand switching.

Strengthen its value proposition and offering, to encourage who visit espresso retailers into McDonald's.

The new "formats", McCafe, having Wi-Fi internet links should help in attracting segments. Also putting in children's play parks and its own focus on educating consumers about health, fitness.

Continued concentrate on corporate sociable responsibility, lowering the effect on the environment and community linkages.

International enlargement into emerging market segments of China and India.

4. 4 Threats

Social changes, Administration, consumer communities encouragement balanced foods, 5 day fruit and vegetables.

Focus by consumer on nourishment and healthier lifestyles.

Competitive stresses on the traditional as new entrants offering value and higher product ranges and healthier standards of living products, (e. g. subway, supermarket, and M&S etc).

Recession or down submit economy may have an effect on the merchant sales, as home budgets tighten reducing spend and amount of visitors.

Pressure teams - environmental.

Question No. 2

Based on the given inside and external data about McDonald's critically evaluate the current strategies used?

Strategy is generally a broad and complex concept. So that they can provide a explanation, Porter (1996) areas: "Strategy is the creation of a distinctive and valuable position, regarding a different set of activities". The substance of strategic position-ing is to choose activities that produce superior profitability because they are differe-nt from rivals' and therefore develop a sustainable competitive benefits.

McDonald's overall proper plan called Intend to Win. Their emphasis is not so much on being the largest fast-food restaurant string; somewhat it is more focused on being the best fast-food restaurant chain. McDonald's strategic positioning behind this plan has generated better McDonald's experience through the execution of multiple initiatives encompassing the five factors of exceptional customer experiences- people, product, place, price, and advertising.

McDonald's comes with several organizational strategies. Some of the orgnizat-ional strategies contain better restaurant functions, placing the client first, menu variety and drink choice, convenience and day-part growth, and on-going restaurant reinvestment. McDonald's plan to continues drive success in 2008 and over and above by leveraging key consumer insights and our global experience, while relying on our talents in developing, examining and employing initiatives bordering our global business individuals of convenience, branded affordability.

5. Marketing Mix

Types of marketing blend that McDonald's use to accomplish their marketing goals are longer operating hours, everyday value dishes, and optimizing efficiency in the drive-thru. McDonald's also use market promotions. Another marketing tool whi-ch McDonald's use s customer conception and expectation. Customer belief is an integral factor influencing a product's success. Many possibly revolutionary products have failed due to their lack of ability to build a healthy notion about themselves in the customers's brain. McDonald is being an internationally renowned brand brings with it certain targets for the customers. Customer expects it to be an ambient, hygienic and a little superior brand that respects their principles.

McDonald's Marketing Mixture (5 P's)

The five P's utilized by McDonald's are:






5. 1 Product

Product is the physical service or product offered to the buyer. Product includes certain aspects such as product packaging, guarantee, appears etc. This consists of both the tangible and the non-tangible areas of the merchandise and service.

McDonald's has intentionally retained its product depth and product width limited. McDonald's researched the behavior of the Indian customer and provided a totally different menu as compared to its International offering. It slipped ham, meat and mutton burgers from the menu. India is the only real country where McDonald's serve vegetarian menu. Even the sauces and cheese found in India are 100% vegetarian.

5. 2 Place

The place mainly consists of the distribution stations. It's important so that the product is available to the customer at the right place, at the right time and in the right quantity. In United Kingdom nearly atlanta divorce attorneys town, there's a McDonald's outlet. There is a certain degree of fun and happiness a customer feels each time he dines at McDonald's. There are certain principles propositions that McDonald's offer to its customers predicated on their needs. McDonald's offers hyg-ienic environment, good atmosphere and great service. Now McDonald's in addition has started offering internet center at their restaurants and they have been participating in music through radio rather than the standard music. There are specific dedicated as for children where they can play while their parents can have some quality time mutually.

5. 3 Price

Pricing includes the list price, the discount functions available, the financing possibilities etc. it should also take into the consideration the possible response from the competition to the rates strategy. This is the main part of the marketing mix as this is actually the only part, which generates revenue. The rest of the three are bills incurred. This price must take into consideration the appropriate demand-supply equation.

McDonald's price strategy is always been not the same as others McDonald's has offered various cost range of meals atlanta divorce attorneys country to capture the entire customer. From top quality to middle class to lower course McDonald's has good charges for everyone.

5. 4 Advertising.













There are three main targets of advertising for McDonald's are to make people aware of something, feel positive about any of it and remember it. The proper message must be communicated to the right audience through the right mass media. McDonald's does its promotion through tv set, hoardings and bus shelters. They use print out ads and the tv set programs are an important marketing multimedia for promotion.

5. 5 People

McDonald's understands the value of both its employees and its own customers. It recognizes the fact a happy employee can provide well and bring about a happy customer. McDonald's constantly does Internal Marketing. That is important, as it must precede external marketing. This includes hiring, training, and motivating able employees. This way they serve customers well and the ultimate cause a happy customer. The level of importance has altered in the following order customers, leading range employees, middle level professionals, front line professionals.

McDonald's in China

In 1990, McDonald has exposed their first store in Shenzhen (Hong Kong). Nevertheless, before they actually began their business, McDonald's got already completed 5 years business research and all sorts of information gatheri- ng such as the income level of the Chinese language people, the kind of foods they enjoy etc. In addition, their re-design of the counter-top, chairs and desks reflected their considerations of the level and body condition of Chinese language people. They made many attempts to promote their American burgers, and wanted to do it again the same success in China market as they have done elsewhere. You will find multiple reasons to explain it; one important concern, which includes once been ignored by McDonald has, is the fact that Chinese people tend to be prefer chicken food than beef burgers, which can be their main products. After determined this issue, McDonald's has tried to change more Chinese preferences with the addition of more chicken dishes into their menu for getting more customers. (Chinese language website)

How the strategy influence by exterior environment?

The external environment can be divided into several sectors. Within this section, I will only discuss two important parts: opponents, social theory (healthy problem) and doubt situation, which can greatly affect McDonald's strategies. Then at the last part of this section, I will discuss a definite strategy they used which dished up because of their future developme-nt purpose.


It is unlikely that McDonald's can always be No. 1. In an gross annual consumer satisfaction study, McDonald's has obtained dead previous among fast-food restaurants since 1992. Inside the fourth quarter of 2002, McDonald's has disclosed its first-ever quarterly reduction; one reason McDonald's is struggling is usually that the consumers began to switch to its competition, such as Burger Ruler, Wendy's, and Subway. These businesses emphasized on offering fresher, hotter, high-quality foods at lower price with faster service.

On the other side, McDonald has made a decision to close 719 terribly undertaking restaurants around world. All of these simply proven that McDonald's might no more be competitive in the fast-food market. Furthermore, if McDonald's cannot adapt exterior environment change, they might be gradually diminished and even changed by other competition. In order to keep their market share, increasing sales and profits. McDonald's has to respond to the threat of competition. In 2003, McDonald has offered the McGriddles sandwiches in the US and the Canada feature breakfast. On the other hand, McChicken Premiere and a zesty poultry have introduced in the united kingdom, France, Italy and Belgium. McDonald's was endeavoring to satisfy customer's desire to have high grade products at affordable prices.

Social problem -healthy issue

With the economical development, people's living benchmarks have increased dramatically these years. People are becoming more concerned about their health issues. It cannot deny that McDonald's has attempted to make itself more convenience for individuals. However, people also think that such varieties of junk food are not best for their health. The earth health organization's report provided that those food not only can cause the fatness of children, but also is part of the reason of creating tumors. Healthy issues became the largest obstacle to the development of McDonald's. Customers were moving over to healthier offering, such as Subway's sandwiches, or KFC's mashed potato rather than fried potato. McDonald's has responded to this healthy pattern. In order to compete, McDonald's has added salads and other lighter options into their menu. In case a mother comes in, she actually is not only buy the happy meal on her behalf children, she'll also be likely to buy herself meals too. the lighter options also encourage existing customers another more often, because there are a higher variety of options.


Internationalizing a company requires tact, finesse and innovativeness. This work set out to investigate a real life start-up a firm and compare their international process with the academic taught theories. McDonald's is a multinational enterpr-ise. As environmental factors affect businesses on the globe same thing happened with McDonald's. it must plan strategies according to culture and character of individuals.

McDonald's is extending its business and growing day by day. The strategies, which McDonald's happens to be using through the process of internationalization, are noiseless affecting, but some of the strategies need modification. Such as taste of men and women and nature of individuals.

McDonald's is really as successful in China just as remaining World but, still KFC and some other local fast food chains are definitely more famous than McDonald's. This research study made me in a position to understand the internationalization process and about the strategies which are being used in true to life.

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