McDonald’s business expansion

(think global, act local)

BACKGROUND:
MCDONALD was started by two brothers known as Maurice

McDonald and Richard McDonald on May 15, 1940 in San Bernardino, California,

United States. McDonald was renamed from “airdrome” which was theirs father’s

food stand and used to sell hot dogs and hamburgers to “McDonald bar-b-que” and

had 25 menu items and after that the restaurant started progressing and became

famous, the brothers begin to franchise their restaurant in the year 1954

Neil fox was appointed as the first franchise and the next restaurant was set in Fresno,

California. In 1955 , Roy croc as an entrepreneur and the milk-shake mixes salesman

attained the franchise of the McDonald outside the city of California after that the first

restaurant of McDonald took place in des Plaines, Illinois where the official formation

of McDonald’s corporation gave birth.

The restaurant progress efficiently and successfully sold 1000 million hamburgers in

1058. In 1961 Roy Croc approached the McDonald brothers and pursued them to sell

all of their business rights to him in USD 2.7 million, Roy Croc also established the

hamburger university.
Introduction:

McDonald is one of the most recognized brands that earned

instant recognition in virtually every country in the world, it is spread in 119 countries

with 30,000 restaurants worldwide and serving around 50 billion people every day.

McDonald's is the world's largest food chain by revenue, serving over 69 million

customers daily in 100 countries across 37,855 outlets as of 2018. Cheeseburgers

they also feature chicken products, breakfast items, soft drinks and desserts. In

response to changing consumer tastes and a negative backlash because of the

unhealthiness of their food, the company has added to its menu salads, smoothies

and fruit The McDonald's Corporation revenues come from the rent, royalties, and

fees paid by the franchisees, as well as sales in company-operated restaurants.

According to two reports published in 2018, McDonald's is the world's second-largest

private employer with 1.7 million employees (behind Wal-Mart with 2.3 million

employees).

Besides earning that much revenue McDonald also take equal part in social activities

and became major sponsor for official and special events such as world cup since

1994and Olympic Games in 1978, the main and important characteristic that makes

McDonald’s different from other food chain is consistency, quality and cleanliness
STRATEGIES:

Job satisfaction:
McDonald’s owners believe that people are their most valuable and

important resource as the compete with national and international fast-food giants

throughout the world; they give their 100% assurance to provide resources in

employee’s growth and training so that they are satisfied with their jobs. perhaps,

because their success strategy depends on their commitment to delivering outstanding

value, their commitment to opportunity also includes support for their employee’s

education for example in Hong Kong they offer free continuing education courses in

business, in Argentina McDonald provides scholarships for employees to study in a

degree granting program that was developed in partnership with a national university.

McDonald’s corporation invest huge resources in training employees of diverse

backgrounds everyday around the world, restaurant crewmembers receive structured

on-the-job training and coaching in work place skills and values.

Global growth:

Since the establishment of the McDonald as the brand recognition it

began spreading throughout the brand and starting strategy was approaching to the

middle and upper class citizens and spreading its franchises to under developing

countries, partnerships with other businesses created huge success to the company.

Going in the same successful path, current management has made partnerships with
companies such as Wall-mart, Sinopec, and Wall Disney to reach more customers.

China was McDonald’s first global country in which it researched a lot before opening

up restaurants, and throughout globalization McDonald was able to do market

strategies and customizing those strategies according to different regions around the

globe by considering their cultural and national variations in order to serve specific

target markets.

Every time the corporate consider to open their franchise they first start research

according to the regions believes, taste, cultural, political and economic situations.

McDonald’s key to success is its business mantra of ‘think global, act local (vignali,

2001), this has allowed company to achieve financial success around the globe. Most

successive strategies that McDonald’s use before opening up its stores is research and

development of its foods. Tastes and preferences vary across the globe, therefore, the

company thoroughly analyzes the preferred tastes, especially to not offend local

cultures.

Adaptation around the world:

As a global brand McDonald’s strategies have always

been different from region to region and that’s the reason its ideas are accepted by

everyone around the world if we compare the strategies for the American market and

the Japanese market for example, you will see a big difference.

In the United States. McDonald's spends the biggest slice of their budget. The company
does many new product trials and innovation in its home country, where it has the biggest
audience. The company's advertising is typically skewed to children in the United States,
where McDonald's produces about 250 ads annually.
In Japan. The company's ad campaigns are widely different. The Japanese ads are focused on
adults as well as children, with some features that are unique to the locale's culture.

Mcdonald adopts its menu and business to each culture which shows respect to each

culture

1. Germany

Because Germans love to eat meat, its burgers combine Nurnberg sausages with beef.

And it's a known fact that Germans love their beer with food, so McDonald's outlets in

Germany also serve beer.

2. Indonesia

The majority of the population in Indonesia is Muslim, therefore, McDonald's adapted

to the eating needs of the population by replacing pork with fish. McDonald's outlets

in Indonesia are Halal and since Indonesians prefer rice over bread, they serve rice as

well, together with some spicy meals that locals prefer.

3. India

India has a very large consumer base and McDonald's adapted its menu to cater to the

locals' tastes and preferences. Beef is replaced with chicken. The Maharaja Mac is the

local version of the standard Big Mac. To cater to vegetarian consumers, McDonald's

in India offers Masala Grilled Veggie Burger, McAllo Tikki and McVeggie. In 2013,

the company opened its first vegetarian restaurant to cater to the local vegetarian
consumers. One of McDonald's India's features is the McCurry Pan, a baked menu

item with curried vegetables.

4. Morocco

In Morocco, pita bread sandwiches are available. The outlets also use traditional spices

such as coriander and cumin. McDonald's offers special menu for Ramadan. They call

it f'tor (end of fasting) and the meal consists of a Big Mac, milk, dates and traditional

Moroccan soup.

5. Japan

Japanese cuisine is very different from the rest of the world. In the initial stage,

McDonald's in Japan retained the

6. McDonald in Pakistan :

McDonald’s first restaurant opened in Pakistan in 1998 in

Lahore and after a week they started another restaurant in Karachi as well, now it’s

almost in every big city of Pakistan.

In Pakistan they also made sure to provide all basic requirements of customers and

making sure they taking care of customer’s preferences with the concept of halaal and

haram. In 2015 when people started doubting their services they started an open door

campaign in which they encouraged the customers to visit their restaurant’s kitchen

and around 20,586 were offered to visit McDonald’s kitchen and witnessed the

promises by McDonald’s are actually true and they mean what they claim.

 They assured the hygiene is first and important priority

  To see is to believe; mcdonald makes sure what customers hear through their

advertising is actually they are committed to do so

 Know what you eat; halaal and haram concept is really debating in Pakistan so

mcdonald assured their customers by showing live food making process that

what they eat is made up of halaal.

Priority on local management:

Throughout the world, McDonald’s gratification is itself

in hiring locals, specifically in order to gain value and affirmation in the country by its

citizens.

The emphasis is based on the think global, act local them of the company. Mcdonald

knows very well how to enhance hidden talents of employees also reward these

employees by allowing them to work their way-up it not only reduces turnover but

also builds company that is of employees who know the business inside and out and

are extremely loyal. More importantly, however, this creates a company that is

committed to one share vision.

Standardization:

One of the greatest concept/idea that McDonald’s is keeping

in mind throughout the beginning is staying constant in operating standards known as

qsc&v (quality, services, cleanliness and value) and that’s the only reason that they

have set their standard and also customer’s faith and loyalty all around the world

The company encourages regions experimentation with the menu to align with local

tests when McDonald’s gets success with a menu in one region, it would then leverage

that experiences in other region

Packaging and recycling:

To stop global pollution McDonald’s also taking

initiatives and made these following strategies

• Eliminate packaging through design innovation, introducing reusable

solutions, and encouraging behavior change to reduce usage

• Shift materials to use 100% renewable, recycled, or certified content and streamline

the variety of materials used to enable easier recovery without compromising on

quality and performance

• Recover and recycle by finding ways to scale up systems to allow for greater

acceptance of recycling, and making it easier for guests to recycle, too

• Close the loop by using more recycled materials in our packaging, restaurants, and

facilities, and

To improve capture rates and reduce the leakage of plastic waste into the

environment,

Working to:

1. Reduce plastic in guest packaging such as straws, plastic bags, cutlery

2. Prioritize innovation of new materials and redesign of plastic packaging to be

more recyclable, their goal is to streamline material types and design

packaging so that it’s easier for customers to recycle.

3. Increase the amount of recycled plastic content used in all parts of our

restaurants, where possible, to help drive demand for plastic recycling. For

example, using recycled plastics in trays, toys, and interior design elements of

our restaurants.

4. Partner with companies and non-profit organizations to support the

development and expansion of recycling programs for plastics. Use their local

restaurants to support community level anti-litter initiatives such as consumer

communication campaigns and clean-up days.

Working in partnership:
 Being a socially active food chain McDonald’s

is engaging with other business community, expert NGO partners, political

stakeholders, as well as our Franchisees, suppliers, customers, and our

restaurant crew to help drive change at scale.

INNOVATION:
McDonald’s always try to bring innovations and now they

are trying innovation that could be helpful for our environment as well such as

Across Europe, they are in the process of switching to new McFlurry

packaging which eliminates the need for a separate plastic lid, which will save

more than 1,200 metric tons of plastic per year. In Sweden, we have also

introduced a more sustainable paper-based cup for Milkshakes, moving away

from the traditional plastic cups.

In McDonald’s France they have introduced a new fiber lid for cold fountain

drinks, removing the plastic lid and the need for a plastic straw. This

innovation will result in an annual reduction of 1,200 metric tons of plastic.

Inviting customers to trial and test new packaging ideas

In June 2019, they trialed a nearly plastic packaging-free restaurant in Berlin for 10

days. They tested edible waffle cups in place of condiment sachets and containers.

Paper straws replaced plastic straws. Wooden cutlery replaced plastic cutlery.
Sandwiches were wrapped in packaging made from grass, not paper. And Chicken

McNuggets were served in paper bags, rather than cardboard boxes.

Product mix

McDonald’s has a product mix composed mainly of food and beverage

products such as

 Hamburgers and sandwiches

 Chicken and fish

 Salads and sides

 Beverages

 Desserts and shakes

 Breakfasts / all-day breakfasts

 Mc café

Places / distribution:
This factor of the marketing mix enumerates the venue of

locations where the products are offered and where customers can access

them

1. Restaurants

2. Mobile apps
 3. Post mates websites and apps

McDonald’s promotions:

This element provide the strategies through which

McDonald’s do its marketing such as advertising, sale promotions, public relations,

direct market

Pricing:

To maximize profit margin and sales volume and giving their customers

affordable pricing, McDonald’s uses the two strategies

1. Bundle pricing strategy

2. Psychological pricing strategy

McDonald’s provide meals and other product bundles for prices that are

discounted by comparing each item separately.

 Conclusion:
Summing up all the strategies and success we can see that McDonald’s is

becoming big and big day by day and making all possible ways to be

accepted globally. McDonalds have become a big scale corporation and have

unique position in the business market and recognized in every corner of

the world . They have taken initiatives to protect the environment and recycling

the products, value their stakeholders and listen them, encourage youth ideas,

bringing innovations, supporting people and communities by funding’s.

As far as their financial status it’s as under

 Global comparable sales increased 4.5%, reflecting positive comparable sales

across all segments.

 Due to the impact of the Company's strategic refranchising initiative,

consolidated revenues decreased 8% (8% in constant currencies).

 Consolidated operating income decreased 8% (8% in constant currencies).

2018 results included non-cash impairment and strategic restructuring charges.

2017 results reflected a gain on the sale of the Company's businesses

in China and Hong Kong, partly offset by restructuring and impairment

charges. Excluding these items in both years, consolidated operating income

increased 2% (2% in constant currencies).

 Diluted earnings per share of $7.54 increased 18% (18% in constant

currencies). Refer to the Key Highlights - Consolidated page for additional

details.
 Goal

1. Accelerate industry progress: By 2020, source a portion of our beef

from suppliers participating in sustainability programs aligned with
Global Roundtable for Sustainable Beef (GRSB) principles and
criteria, and that meet McDonald’s requirements for each applicable
market.
2. Share knowledge and tools: By 2020, engage with beef producers
through outreach projects to help develop and share best practices
related to our Priority Impact Ares

3 . Promote Flagship Farmers: By 2020, use our Flagship Farmers program to select and
showcase our most progressive suppliers.

3. Pioneer new practices: By 2020, set up McDonald’s progressive farm

partnerships to trial and discover new practices related to our priority
impact areas
4. Pioneer new practices: By 2020, set up McDonald’s progressive farm
partnerships to trial and discover new practices related to our priority
impact areas
5.
The Company will partner with Franchisees to reduce greenhouse gas
emissions related to McDonald’s restaurants and offices by 36% by
2030 from a 2015 base year.

References:
McDonald’s corporation
McDonald’s corporation full food menu
Histrich, R.D ramadani, v . (2017) entrepreneurial marketing mix in effective
entrepreurial management (p 75-99) spring international publishing
Corporate. McDonalds
Cnbc.com