International Strategy McDonald Corporation

Introduction

This paper requires an “International Strategy” formulation for a multi-national company to invest in a country to achieve desperately higher growth. Here the preferred company is “McDonald Corporation”, the US largest fast-food chain restaurant and famous delicious food and prime quality services. Here the target host country is India, the fourth economically powerful country in Asia and second largest populated country after China.

McDonalds Corporation

In 1940, McDonald Corporation, the legendary chain restaurant of the globe has established in California, USA. Besides domestic market, they operate their restaurant business by franchising. Last fiscal year, annual revenue of the McDonald was US $ 23,522,400,000. Around the world, number of restaurants is 32,060¹, which has sprinkled among 118 different countries. Major host countries are- UK, Germany, Canada, Asia Pacific, Japan, China, Australia, Middle East and EU ² countries (Bizjournals, 1).

Products and services those the company deal with are as French fry, pizza, hamburger, chicken fry, salad, deserts, soft drinks, beverages, juice, milkshakes, coffee etc and these meals are available for breakfast, lunch, and dinner. ‘Make the meal fast and easy’ is their business mission; in addition, they ensure proper food values and nutrition (Bizjournals, 1) & (McDonald Corporation, 13).

The major competitors of McDonalds in home and abroad has presented as below

• Subway
• Burger King
• Starbucks
• Wendy’s
• Taco Bell
• Pizza Hut
• Dunkin’ Donuts
• KFC
• Sonic Drive-In

Target consumers of the McDonald Corporation are- different age category like- teenagers, young and adult, all types service holders, for example, business people, jobholders, students, and event management as well as even for home makers. As par clients’ demand, they have a plenty of service provider tools such as- well-decorated restaurants, fast food chain, sufficient motor vehicles for take away, home services, and online order delivery. Pricing strategy and their service quality are also playing significant role to elevated sale to all classes of people (Bizjournals, 1).

Host country- India

The Republic of India is the world’s seventh largest country that geographically sited at South Asia. Four different criteria exist in its geography- Bangladesh and the Bay of Bengal at the east, Arabian Sea and Pakistan in the western part, at the northeast stayed Nepal and Bhutan, south contains the Indian Ocean. New Delhi is the capital city and major cities are- Mumbai, Bangalore, Kolkata, Hyderabad, Chennai, and Chandigrah. Twenty-eight different states have 28 different mother tongues, where Hindi and English is their official language. Rupee (Rs.) has termed as their currency. Besides Islam, Buddha and Christian, Hindu are their major religion and No other countries in the world have a large number of Hindu people like India (Indian Industry, 1).

• Economic feature: following are the key financial features of India. Prime foreign trading countries are- USA, UK, UAE and China. Main export products are- textile goods, engineering goods, jewellery and gems, leathers and chemicals, food processing and software. Economic system composed within capitalist market economy mixed with socialistic command economy (Indian Industry, 1).

• Social trends- Since the geographical feature Indian’s people enjoy long life. Income distribution is not sound; literacy percentage is increasing proportionately with the increase of technology especially in IT³. More specifically, it is compulsory to learn English and Computer operating function in school by government rule (Indian Industry, 1).
• Political risks- Political framework has outlined through Federal Republic with their 28 states and 7 unions’ territories. Democracy practice of India is most popular around world. Corruption levels are moderate and have adequate prohibition law (Indian Industry, 1).
• Market attractiveness tools: McDonalds have positive prospect in Indian food market. Most of them are vegetarian and Hindu people and they have a strict restriction of eating beef. Therefore, vegetable items, chicken fry, coffee, soft drinks, beverages, milkshakes etc would be most preferable product line (Thompson & Strickland, 221).
• Utilization of mass communication: Print and electronic media, posturing, and online would be effective advertisement approaches affiliated with reasonable prices. Young, adult and teenagers would be the best customers who require staying outside of home most of the time. Franchising will be preferable than licensing (Hitt, Ireland, & Hoskisson, 212).
• Challenges for the McDonalds Corporation: Like all other multi-domestic companies, the McDonalds would be faced a few challenges in India during business operation. Major probable threats are (Johnson, Scholes & Whittington, 27)

  • Competitors’ threats- Offering low price and satisfactory substitute products are threats of competitors’.
  • Domestic threat- Domestic threat such as low price and substitute products, suitable location of restaurant are the key features of domestic food supplies;
  • International threat- Internationally, global recession, and bird flu are the major crisis.
• CH ‘eight’ concepts for strategy implementation: A brief description of CH 8 concepts for strategic implementation in abroad has presented below in the light of the McDonalds Corporation’s establishment in India. These stages are also termed as “Action agenda of the strategy implementation” (Miller, 385-415).
• Strength of the company: On the top of financial strengths, competency and capabilities are the sources of McDonald’s entire strength. These three forces would bring success for them.
• Budget development: As other developing countries, labor cost, lease of land and building, energy costs etc. are cheap in India. Consequently, it would not be required high budget for new branch launching.
• Establishment of strategies: Friendly policies and efficient process would stalwartly establish strategies of the McDonalds.
• Practice of continuous development: Success of everything comes up by the practice of continuous development and improvement. The McDonalds has plenty of managerial skill, efficiency, and power that prolong them for a long time successfully operation around world.
• Employee development: e-commerce is the best tool of continuous communication with employees. Both the McDonalds and India have the adequacy of it.
• Performance evaluation: reward and incentives are proactive approaches of employee motivation. Performance evaluation through these is one of corporate culture of the McDonalds.
• Sound corporate culture: Though discrimination among classes has practiced through for a long time in India, the McDonalds has proficiency to design a sound corporate culture by removing racism, employee benefits, practice of business law, and without any discrimination among sex etc.
• Proper leadership style: Rather than autocratic, supportive and para diagram shift are the proper leadership style for success.

Recommendation

From the previously mentioned analysis, it has assumed that for the McDonalds Corporation it would be a milestone decision to target India as a host country. Considering both geographical and economical condition, it would provide a great support. Moreover, political stability, employment of IT infrastructure and large number of population are other positive forces would inspire to go there for business operation. Low labor costs, public demand, low cost energy supply are also the supportive issues.

Works Cited

Bizjournals. Company Profile McDonald, para: 1-4, 2009. Web.

Hitt, Michael, Duane Ireland and Robert Hoskisson. Strategic Management: Competitiveness and Globalization: Concepts & Cases, 8th edition, 2007.

Indian Industry. Country Profile India, 2009. Web.

Johnson, Gerry, Kevan Scholes and Richard Whittington. Exploring Corporate Strategy, 7^th edition, Prentice Hall, India, 2006, ISBN: 027368795, pp. 26-28.

McDonald Corporation. McDonald’s Corporation: Annual Report 2008. Web.

Miller, Alex. Strategic Management, 3^rd edition, McGraw Hill, NY, 1998, ISBN: 0-07-115401-9, pp. 385-415.

Thompson, Arthur and Strickland. Strategic Management Concepts and Cases, 13^th edition, McGraw Hill, 2008, ISBN: 0-07-049538-6, pp. 200-223.

Footnotes

1. McDonalds Corporation, Annual Report 2008.
2. European Union.
3. Information Technology.