Globalization of Globalization of McDonald’sMcDonald’sAngela Garcia AkerDaniel BerginTithi Dutta RoyCeline ManoosinghSilvana Osorio VanhoutenDerek Sullivan

McDonald’s: An McDonald’s: An IntroductionIntroduction Founded in 1940 by brothers Dick

and Mac McDonald.

Sold to Ray Kroc in 1961 for $2.7million

“Salesmanship is the gentle art of letting the customer have it your way.”

Ronald McDonald introduced in 1965.

Globalization began is 1967 with first international restaurant in British Columbia.

Drivers behind McDonald’s Drivers behind McDonald’s GlobalizationGlobalization

Drivers for company globalization◦ Increase profits and customer base in new

markets

◦Decrease labor costs

◦Get access to new sources for raw materials

Drivers against company globalization◦Domination of local economy, getting tax breaks

◦No respect for local customs

◦Hiring most talented personnel from that country

◦No transfer of advanced technologies

Drivers behind McDonald’s Drivers behind McDonald’s GlobalizationGlobalizationHow locally owned franchises are run

◦Subsidiary of US (i.e. Australia)◦ Joint venture partner with US (i.e. India)

Support for McDonald’s in the book Golden Arches East (from Global Policy Forum article)◦Respect for local culture◦Locally owned franchises◦Buying ingredients from local

communities◦Altering regional menus to conform to

local tastesOpposition against McDonald’s

◦Anti-McDonald’s Day every October 16◦Jose Bove, the French farmer◦McDonald’s vs. McCurry in Indonesia

McDonald’s Marketing and McDonald’s Marketing and Customer ServiceCustomer ServiceMust satisfy customers while

maintaining their identity◦Most countries see McDonald’s as an

American restaurant serving American food

◦To fit in, customer appearance was adjusted for each country

Had to recognize the resistance for their entry and have a solution to it◦Offensive food practices◦“Fast” food away from the family table

McDonald’s Marketing and McDonald’s Marketing and Customer ServiceCustomer ServiceKeys to success

◦Maintaining image of a “family” environment

◦Adjusting décor to specific culture Makes restaurant feel like a local establishment

◦Food choices for target customers◦Maintaining good customer relations

Sometimes is much more difficult than in the U.S.

Russia had a difficult time maintaining good customer service

McDonald’s International McDonald’s International Food VariancesFood VariancesMust be able to adapt to wide spread of cultural differences and local cuisines Operates in 118 countries serving 47 million customers Over 60% of revenue comes from international market US market considered saturated, more opportunity abroadAccommodate Religious and Cultural Differences

• India- No beef or pork, instead Halal chicken, lamb, and

fish- Vegetarian centric menu with meat prepared

separately• Japan

- Seafood items including Shrimp and Teriyaki Burger- Seaweed, Barbeque or Italian Basil flavored French

Fries- McDelivery Service offers 24 hour delivery

• Europe- Greek Mac (Big Mac in a Pita)- Metric system means Quarter Pounder is now the

Royal- Beer is served in France, Netherlands, Germany

and Austria

• South America- Kosher branches in Argentina use

BBQ Grill instead of frying- Venezuela offers empanadas and

burritos• America

- New England serves seasonal crab cakes and lobster rolls

- Midwest serves Johnsonville Brats- South offers Cajun McChicken

Sandwhich- Hawaii serves saimin and the Spam

McGriddle Sandwhich

McDonalds- Advertising Across Cultures

• Different cultures require diverse marketing approaches

• Cultures differ on many factors such as language, clothing, architecture, sports, cuisine and religion.

• How to impact different regions of the world• understand their culture• what attracts that culture• implement different methods for each• delivery of the message

McDonald’s Global McDonald’s Global Marketing StrategiesMarketing Strategies

Latin America vs. AsiaLatin America vs. Asia

Latin America-Ad mainly focused on

family -the centerpiece of the Latino Culture

-Ad Description: Father and son talking about life

- The style and rhythm employed in the music of the commercial recalls times of happiness and enjoyment, and goes along with the visual part of the ad.

East Asia-Ad intended for young

people and fashion lovers

- Ad Description: Young teenager, fashionable

- -Also, race plays a role. They Japanese ad uses an American looking model instead

- - Teenagers in Asia respond to American culture and looks.

Economic Success Economic Success OverseasOverseasThe first McDonald’s appeared in 1940 McDonald’s began internationalizing in 1967McDonald’s is rapidly growing in Europe,

more than 6,200 restaurants in 51 countriesIn China they had to close 175 different

restaurants due to low employee performance

in Venezuela when they shut down all of the stores in Venezuela for 48 hours due to irregularities in the financial books of the fast-food chains.

Economic Success Economic Success OverseasOverseasSome of the countries where you can find

McDonald’s are Australia, Austria, Belgium, Brazil, Canada, China, Colombia, Denmark, Egypt, France, Germany, Greece, Guatemala, Mexico, Peru, Portugal Singapore, Taiwan, United Kingdom, Uruguay, and Yugoslavia

McDonald’s is doing quite a bit to get in charge of the growing market. McDonald’s really knows how to do business because they keep even control levels between franchise and franchisee. It also shows how McDonald’s has been able to overcome the problems that can happen during the internationalization.

In SummaryIn SummaryMcDonald’s is one of the best examples

of globalization out thereSuccessfully responded to

◦ Drivers for and against globalization◦ Cultural differences through marketing,

customer service, advertising, and food choices

McDonald’s has had great examples of success overseas

Interesting to witness McDonald’s next steps and if it can maintain worldwide status