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Case Study International Management: McDonald

Question: International Management: McDonald

McDonald’s is a force to contend with both domestically and globally. The company has been a success story world-wide because of its focus on marketing details and because it plans globally yet acts locally. Choose a doughnut/cinnamon bun/bread company with presence in two global markets. Access the two countries’ specific Web sites for the product you wish to discuss.

List the differences in product offerings in these 2 host countries and then compare same to the home based product:-

• Go to your company’s Web site in the 2 countries and discuss the promotion/advertising that is done there. Is it different or the same as the home base advertising?

• Explain Read information on another company in a country which is once again different from your countries and Compare and contrast the findings to yours, draw and share your conclusion in a substantive response.

• Visit the cia.gov Web site and check the world fact book for the countries you have covered – 6 in total (your 2 and the interactive 4).

• Explain your views as to the fit between product and location based on the following forces: political legal (3 factors), economic (3 factors), and socio-cultural.

Answer: International Management: McDonald

Introduction

McDonald’s is known for its cultural adaptability and launching products that suits local taste. The home country of the company is the US. The two countries selected for comparison of McDonald’s product offerings are India and China. The comparison and external environment factors are presented below.

Comparison of McDonald’s product offerings in India and China

In India, McDonald’s offer a large varieties of burgers in the vegetarian menu. Non-vegetarian offerings are also present. However, the vegetarian category has more options and varieties. For example, the vegetarian menu includes McVeggie, McAloo Tikki, Paneer Salsa Wrap, Pizza Mcpuff, and Crispy Chinese. On the other hand, non-vegetarian offerings include only chicken and fish as the main ingredients (McDonald’s India, 2014). In China, products are offered in accordance to the local taste and preferences. Chicken McNuggets in China can come with the chili garlic sauce, and barbecue- with sweet and sour taste as Chinese prefers to have the combination of sweet and sour.

All the chicken burgers in the McDonald’s China menu use the ingredient of thigh fillet instead of chicken breast as used in the US. At the time of Chinese New Year, the company offers a special meal of grilled chicken burger and curly fries, with the horoscope of the twelve zodiac animals present in the Chinese astrology and give the offerings in traditional red packets (McDonald’s China, 2014). In the home country i.e. the US, McDonald’s offer a large varieties of burgers including beef and pork. It is only in India that consumers would not find any beef or pork offering due to religious sentiments (McDonald’s India, 2014).

The advertising in India and China for McDonald’s products is different as seen from the company’s websites. McDonald’s China website is in local language (McDonald’s China, 2014). McDonald’s India website is in English. Prices are set to suit the large segment of Indian consumers without quality compromise (McDonald’s India, 2014). Dunkin Donuts is another fast food company through which local adaptations can be seen. It is highly popular in South Korea. Besides the standard American versions of glazed and filled donuts, it specifically offers glutinous rice and red bean donuts along-with sesame tofu ring, which is a famous ingredient for dishes in South Korea (Fast-food chains adapt to local tastes, 2010).

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Fit Between Product And Location

Political and legal factors:

• Governmental regulations and restrictions of law: Door-to-door selling cannot be used in China. In Germany, comparative or superlative claims should be avoided, such as better and best.

• Difference in political backgrounds: Planned economies are heavily protected by the governments.

• Legal ramifications for marketing the product: In Japan, McDonald’s pronunciation was changed to MaKudonaldo as per the law to have Japanese name (Grant, 2010).

Economic factors:

• Income of the consumers: Cheapest Mcburger can be found in India with price tag of $1.62, the price of same product is $4.22 in the US and $2.74 in China (Which country has the cheapest Big Mac, 2014).

• Financial situation: When economy is sluggish, company cut down prices, for example, it cut down 40 percent of products’ prices at time of recession in 2008-09 (Grant, 2010).

• Price attitude: Indian and Chinese consumers are price conscious. Adaption to product can be seen in offering value meals such as happy menu in India and Daily Extra value meal in China (Grant, 2010).

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Socio-cultural factors

• Religious sentiments: Avoidance of beef and pork in Indian culture has led to no presence of such ingredients in any of the product offerings in India (McDonald’s India, 2014).

• Inclination towards western lifestyle: Rapid expansion of western style fast food chains in Asian markets (Grant, 2010).

• Preference for local ingredients: McDonald’s China adapted to local culture, for example, included typical Chinese elements such as pancakes, scrambled eggs and hot tea (McDonald’s China, 2014).

Conclusion

Local adaptation of products is necessary to create own space in the international territories for multinational companies. McDonald’s research well before it enters any new market to know and understand local preferences, tastes and culture. It adapts its product offerings accordingly to suit local taste and preferences. Company has become successful all over the world due to its deep understanding of local scenarios.

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References

Fast-food chains adapt to local tastes. (2010). Retrieved September 29, 2014, from https://edition.cnn.com/2010/LIVING/homestyle/04/08/fast.food/
Grant, R.M. (2010). Contemporary Strategy Analysis and Cases: Text and Cases. New York: John Wiley & Sons.
McDonald’s China. (2014). Retrieved September 29, 2014, from https://www.mcdonalds.com.cn/cn/ch/index.html
McDonald’s India. (2014). Retrieved September 29, 2014, from https://www.mcdonaldsindia.com/aboutus.html
Which country has the cheapest Big Mac. (2014). Retrieved September 29, 2014, from https://money.cnn.com/2014/01/24/investing/big-mac-index/

June 27, 2016