There are many businesses that have expanded their business internationally in order to benefit in some sort of way rather it revenue or a better market for their product. In this thesis, I will research a multination company and its international strategy over the last 10 years. I will elaborate on it international orientation and rather it etho-, poly-, or geocentric. I than explain why the company decided on expanding to the chosen locations. Then I will clarify if they had core capability to succeed in those markets, along with its opportunities and constraints. Last, I will define value chain dispersal and integration strategy and describe the strategy that’s organized around it.
I chose to research McDonalds, because it is one of the most successful restaurant chains around the world. They use effective management to strategize global expansion. . They develop effective customer brand loyalty through their Human Resource Department and company personnel. McDonald’s international orientation has ethnocentric and polycentric approaches. Its ethnocentric approach begins with how they initially entered international markets by leveraging standardized product offerings, clean and bright environments, and American brand equity (McDonald’s Success Strategy and Global Expansion through Customer and Brand Loyalty). But with changing times McDonalds have adapted to local regions remodeling it retail space and while changing product line to appeal to local taste. By the golden arch being connected to American culture, it can be at risk in other countries by not staying true to what McDonald’s stand for. By brushing aside ethnocentric considerations, it could be an identity lost.
The polycentric approach is how they provided growth and employment to a vast number of minority groups in the United States and people around the globe. McDonalds is culturally connected around the world be providing business training for employees in Hong Kong and in the UK offering 1800 to employees to continue their education, just to name a few. The influence and most of McDonald’s success is the investment of significant in their employee’s growth and job satisfaction. McDonalds was founded in 1943, and 1967 British Colombia was its first international expansion, advertising to middle and upper class. McDonalds decided to expand internationally, due to the enormous success in America. There was heavy research involved in the expansion. Through globalization and internationalization, McDonalds were able to develop marketing strategies according to cultural needs, to serve specific target markets. McDonalds enter India’s foreign market and 1996 and is a tough foreign market to enter, but with McDonald’s success they were able to earn high revenue in India.
The success strategy is researching and the development of food. McDonalds thoroughly analyzed the preferred taste, especially to not offend locals. Their key to success is to “think global, act local.” Furthermore, McDonald’s is a true franchise success; the success of McDonald’s goes back to its roots, the start. By being consistent and providing quality service, cleanliness, and values at all times, customers have nothing to complain about and customers always know what to expect locally and internationally. With making things new and fresh, innovation is a key component to the success internationally. By taking the necessary steps and observing differences in cultures, they were able to tweak their products without causing disruption. Also, McDonalds turns bad into success, by being in the forefront of environmental issues McDonalds took their issues and established their own Global Environmental committee and outlined the steps to reduce solid waste. Over the years there has been much global health concern, mainly in relation to children. In response to the concerns, McDonald’s formed the Global Advisory Council (GAC) in 2004.
The GAC is an international team of independent experts assembled by McDonald’s to provide us with professional guidance in the areas of nutrition and children’s well-being (The Success of McDonald’s Franchise). Finally, what is value chain dispersal and integration strategy? Value chain dispersal is how a business receives information and takes the information to add value to their business in the selling of their product to customers. Value chains can produce goods or services. The goal of the business to produces maximum value for the least total cost. Integration strategy is use in the training of management and employees, reduce in-effective communication, and reduce cost. The international strategy that is organized around value chain dispersal and integration strategy involving McDonald’s, is that they know their strengths and weaknesses.
Adding values strengthens the corporations as a global economy, where the weaknesses are transformed into a positive factor. These projects take effective management. Effective in management in turn can produce great employees, in which they can effectively communicate and execute the mission and statement. In conclusion, it was very informing to research a franchise success, such as McDonald’s. What is even more intriguing is their success locally and internationally and how they cater to different cultures, by researching needs and wants. McDonald’s knows what takes to be a huge success is and success takes brain-storming, along with talent.
McDonald’s Success Strategy And Global Expansion Through Customer And Brand Loyalty. The Clute Institute Journal Of Business Case Studies, 3. Retrieved from http://journals.cluteonline.com/index.php/JBCS/article/view/4857/4949 McDonald’s International Strategy: Squander Brand Equity? (2009). Retrieved from http://www.sundarganapathy.com/blog/2009/04/20/mcdonalds-international-strategy-squander-brand-equity/ Roger, Arvind, Kashlak, Rabi, Bhagat, & Phatak (2009). International Management: Managing in a Diverse and Dynamic Global Environment (2nd ed.). [Course Smart Solutions]. Retrieved from http://wow.coursesmart.com/9780077674113/?CSTenantKey=coloradotech&spid= The Success of McDonald’s Franchise. (n.d.). Retrieved from http://www.franchisedirect.com/information/trendsfacts/thesuccessofmcdonalds/8/1111/#note4