The McDonald’s is the global fast food giant, introduced in 1940, in San Bernardino, California by Dick and Mac McDonald of Manchester, New Hampshire. It places its headquarters in Oak brook, Illiona US. Their introduction of “Speedee Service System” in 1948 established the principles of the modern fast food restaurant. It revolutionized the American restaurant industry by imposing discipline on the production of hamburgers, French fries, and milk shakes. The McDonald’s Corporation’s earns revenue as investors in properties, as franchiser and as an operator of restaurants.
5% of McDonald’s restaurants are owned and operated by McDonald’s corporation directly, while the others are operated through variety of franchisee agreement and joint ventures. In addition to ordinary franchise fees, supplies, and percentage of sales, McDonald’s also collects rent, partially linked to sales.
Forty eight years down the line, they are one of the leading restaurant chains in the world, touching the live of people every day. Currently, McDonald’s has more than 31,000 restaurants in 119 countries, which are on every continent except Antarctica, serving more than 58 million customers each day and employing more than 1.
million, with revenues of about $23 billion. The menu has expanded to reflect more sophisticated and health-conscious tastes. It sells Hamburgers, Chicken sandwiches, French fries, Soft drinks, Breakfast items and Desserts. It also offers Salads, Vegetarian items, wraps and other localized fare. It is backward vertical integration because McDonalds expand their operations into industries that produce inputs to the McDonald’s products. Types of restaurants include Mc Drive, Mc Cafe, Mc Express, and Solid Gold McDonald’s. Sub brands include Piles Cafe, Chipotle Mexican Grill, Donatos Pizza, and Sun partners.
Their main focus is on Service, Hygiene and Products. It focuses on forward Integration and international growth through a franchise business model with McDonald’s model as the norm for other franchise organizations. It also focuses on backward integration and new product development by adaptation and innovation, to meet the needs of a diverse consumer market—as shaped by demographic, economic and local factors around the world. Organisation structure??? Globalisation As a major multinational corporation, McDonald’s operates 30,000 restaurants in 119 countries around the world.
McDonald’s opens a new restaurant every eight hours — 2/3 is located outside the U. S. There is a McDonald’s restaurant on every continent except Antarctica. With the expansion of McDonald’s in too many international markets, the company has become a symbol of globalisation sometimes referred to as the “McDonaldization” of the society and the spread of the American way of life. McDonald’s “global momentum is apparent”. While the fast-food chain was not “immune” to the slowing economy in the United States, half the company’s profits were generated from international sales.
McDonald’s was still taking market share in the United States despite decelerated sales and “has unbelievable strength across all regions outside the U. S. ” The following case study will explain the impact of the spread of McDonald’s to the world, but, specifically, to Japan. Has the coming of McDonald’s restaurants brought American culture to Japan? And, if so, to what extend can we speak of cultural imperialism? McDonald’s has gone a long way from being just a simple drive-in. In 1971 the chain reached Japan and it immediately was a huge success.
McDonald’s Japan was the same concept as McDonald’s America, but they did adjust the menu a bit to suit the Japanese taste. For example, McDonald’s introduced the Teriyaki Burger, the Rice Burger and the Green Tea Ice-cream. Except for the slight changes in menu, there are other differences between McDonald’s America and Japan as well. This has to do with the way McDonald’s was received by the Japanese consumer. There are several ways to explain the conception of McDonald’s food as a snack. First of all, McDonald’s food cannot be shared: sharing is an important part of the Japanese dinner or lunch time because it brings a sense of community.
Secondly, McDonald’s food consists mostly of meat and bread. To the Japanese, meat has always been a part of the Western diet and not of their own traditional lifestyle. Therefore, the combination of meat and bread is in fact quite alien to the Japanese. In addition, the fact that McDonald’s food lacks rice makes it unsuitable for a proper dinner or lunch: according to Japanese, a real meal always includes rice, which is not only seen as good nutrition but also as a metaphor for Japanese national identity. McDonald’s did not only introduce a new type of food to Japan, it also introduced a new way to eat.
These table manners are actually the opposite of the Japanese way to eat. At McDonald’s, you eat whilst standing instead of sitting, and you use your hands instead of chopsticks. Also, McDonald’s made it more common to drink sodas directly out of the bottle and to eat ice-cream. Although all these things were previously considered very negative, McDonald’s gave a positive twist to them. McDonald’s became an ordinary feature within Japanese society. Being able to adapt to an environment ensure success, therefore the concept of “think global, act local” has been adopted by McDonald’s.
There are many situations where McDonald’s adapted the product because of religious laws and customs in a country (Global goes Glocal) McDonald’s was initially a symbol of America; or, a symbol of America as perceived by the Japanese. It gave people a chic and exotic feeling. Nowadays, McDonald’s has actually become ‘local’ in a certain way. This would rather be called as ‘glocal’; a concept to illustrate the intermingling of the global and the local. McDonald’s is indigenised by the Japanese. Japan adapted McDonald’s to suit its own society.
McDonald’s is a place to have a quick snack. Japanese can eat a Teriyaki or Rice Burger, drink Oolong tea, and read the Japanese McJoy magazine. McDonald’s is embedded in Japanese culture now, and the concept of McDonald’s is not interpreted the same way all over the world: each culture, like Japan, fits this into society the way they find appropriate. In this way, no matter how globalized the world will be, McDonald’s will still have diversity in cultures: global will just become glocal. In the end, it cannot be denied that there is a difference between a Big Mac and a Rice Burger.
Corporate Social Responsibility The McDonald’s Social Responsibility Report provides a global perspective on where social responsibility fits into the company’s business strategies and provides a snapshot of McDonald’s performance and progress in four broad categories, beyond just economic indicators: community, environment, people and marketplace. Environmental Responsibility, for example In collaboration with other businesses around Shinjuku, McDonald’s Japan participated in a pilot program to examine the feasibility of recycling paper cold cups.
Beginning in 2005, 10 McDonald’s restaurants in Shinjuku participated in the pilot, along with three office buildings from Coca-Cola and Japan Beverage, to generate enough volume for the collection. After lids are removed and liquid is dumped out, the cups are collected and transported to the recycling factory. A total of 11 tons of paper cups are currently being recycled annually. McDonald and NGO On August 1, 1990, McDonald’s and Environmental Defence Fund joined forces in a groundbreaking partnership to find ways to reduce McDonald’s solid waste. The project team examined McDonald’s materials use and solid waste issues in its U.
S. operations, including restaurants, distribution centres and suppliers. The goals of the partnership focused on the following: * Source reduction: Using less material * Reuse: Introducing reusable throughout the supply chain * Recycling: Return materials to productive use * Composting: Recycling organic materials when possible * McHappy Day McHappy Day is an annual event at McDonald’s, where a percentage of the day’s sales go to charity. It is the signature fundraising event for Ronald McDonald House Charities. Localisation McDonald’s worldwide is well known for the high degree of respect for the local customs and culture.
This is evident from the explanation of the following question: Why Customisation in India? Consumer tastes/ preferences – McDonald’s has developed a menu especially for India with vegetarian selections to suit Indian tastes and preferences. Keeping in line with this, McDonald’s does not offer any beef or pork items in India. It designed the menu that beside vegetarian products includes only chicken, mutton and fish products. Laws and Customs – Food is a family affair in India thus the company has to market products to a group of people who prefer family dining. Indians prefer on-site cooked food over packaged food.
Vegetable products are 100% vegetarian, i. e. separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving. Thus, McDonald’s was marketed as a fine dining restaurant where a family can enjoy group meals in a comfortable set up. Population diversity and pricing – Difference in urban, semi-urban and rural market, price sensitive Indian customers, and large variations in paying capacity across variation markets, all these problems were addressed by McDonald’s by using the right value proposition.
For example, in 2004 the Happy Price Menu, Value for money (like Ice-cream cone at Rs. 7) was launched to attract price-sensitive middle-class individuals. Supply chain – Protests from politicians and social activists of raw materials from outside India, Government regulations to source from local suppliers and high cost of sourcing materials from outside, based on all these issues McDonalds created a large and complex supply chain which included direct and indirect suppliers. It also helped to reduce the manufacturing cost and thus serve McDonald’s burger just for Rs. 25. Unmatchable Taste at an Unmatchable Price became the USP of the Indian version of McDonald’s. ” Cross Culture Consumer Analysis – To what extent consumers of two or more nations are similar and different View Point In spite of McDonald’s being a most profitable and preferable food company among the diversified world, we still cannot deny the fact that it heavily contributes to a Dramatic rise in clinical obesity McDonald’s positively affects the world by providing local employment opportunities, supporting local programs and charitable causes and healthy options in the menu.
However, while the overall image of McDonald’s is that of a wholesome, family oriented business, there are contradictions to this image. Ethical Problems – The practices of using food from extreme distances, is problematic environmentally. From a public health perspective, the use of beef from multiple sources makes contaminated sources far more difficult to trace. Labour Relation – In the 31,000 McDonalds worldwide, most of the workers get paid minimum wage in spite of the fact that the company is now worth more than a billion dollars. Conclusion
McDonald’s has built one of the most successful fast food franchises in the world, with incredible growth for over three decades. The company’s long-term strategy has focused on uniformity in its product, service, and the consistency of its information systems. However, with a slew of recent challenges, McDonald’s has been able to adjust with each challenge and economic condition. It successfully used an approach of offering value and premium products, and effective marketing that made McDonald’s “increasingly relevant in the international marketplace”.
The company’s main new concern is portraying their sense of healthy eating habits and staying ahead of the competition by encouraging new and better methods of meeting local needs. McDonald’s have lower market growth in domestic market (US) than in the global market, thus it can be stated that Globally, they are positioned as a Star brand and have the ability to obtain a higher market growth and hence profitability. But, both in the US and globally it is a dynamic and responsive business.
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