McDonald’s is a world-famous company that provides fast- food in China. In the course of offering its services, it faced stiff competition from its rival Kentucky Fried Chicken company. The management therefore had to put into consideration some local business practices such as quality of food, staff welfare and other environmental issues. McDonald’s restaurants in China were being operated as joint ventures along with other local companies.
This ensured elevated brand quality and effective management control as compared to its competitors in the market place. Additionally, its ability to quickly adjust to the varying local conditions made it to take advantage over many other competitors (Ko, 2008, 1). Through the invention of the new technology and vast capital, the company developed its own internal supply network which made them to have access to both domestic and export markets.
The development of infrastructure enabled it to get its supply from within the country thus saving cost of importation. McDonald’s implemented the traditional Chinese culture which enabled it to quickly make its way to the market. For instance, it decorated its restaurants with designs symbolizing traditional Chinese culture. It also offered special festive items such as Prosperity burger during the Lunar New year. This attracted many people to eat from their restaurants. The company kept on adjusting its menu in order to capture the favorites of the people.
Due to the rising competition in the market place, McDonald’s had to partner with Sinopec, a petroleum company, in order to build drive-through restaurants in most of its petrol stations in China so that it captures many customers to counter the high rate of competition. They had also to collaborate with the Chinese online shoppers so as to attract internet users for their foods and other promotional items. The company carried out an advertising campaign to bring awareness to the people of McDonald’s products.
McDonald’s took advantage of young Chinese customers’ social influence. Despite the fact that it was offering its food at higher prices, the young generation viewed this restaurants as trendy places to socialize with their friends and families. They also preferred the restaurants’ site as they offered good atmosphere for relaxing. McDonald’s engaged in national campaign and took benefit of Beijing hosting the Olympic Games. They used the Chinese slogan which made it to attract many customers which made it to improve its business operations. Opportunities and threats
McDonald’s faced great challenges, for instance, the rising inflation in china made it to raise its prices for almost all its products in order to make up for the surging cost of materials. This made the level of consumers to decline drastically. It also faced social threats and critics which pointed out that they did not apply health and environmental standards observed in China (Ko, 2008, 3). The transformation of China to a developed nation posed a threat to McDonald’s as it was uncertain whether it was going to sustain its momentum of operation. Marketing strategies
To sustain its operations, McDonald’s should carry out some marketing strategies such as engaging in successful community and media relation program that will enable it to have increased coverage and reputation without spending a fortune. Another strategy is to set up joint promotions. In this case, McDonald’s must identify uniqueness and behavior of its frequent customers, look for other non-competing businesses already reaching them and then formulate a technique to set up joint promotions. They can also make use of emerging market trends and take advantage of increased sale opportunities before their competitors.
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