McDonald’s global marketing strategy Essay
McDonald’s global marketing strategy
1. Identify the key elements in McDonald’s global marketing strategy (GMS). In particular, how does McDonald’s approach the issue of standardization? McDonald’s has become the most famous and successful fast-food restaurants all over the world. The concept of fast food and American-style food (burgers, fries) has conquered the world. We can talk about standardization regarding Mcdo’s strategy: the marketing mix is basically the same. Products:Fast food, American food (Burgers, fries and soda) Price:Cheap, “Burger Index” *
Promotion:American style, mass communication, attract children, same brand name, colors and logo Place:Quick service, crowded area
However, we cannot speak about a total standardization since McDonalds has adapted its menus, declining its marketing mix regarding some aspects of the local cultures. * The expansion and standardization of the hamburger has led to the creation of a price index that can be used as an economic reference between different countries known as the Big Mac Index.
2. Do you think government officials in developing countries such as Russia, China, and India welcome McDonald’s? Do consumers in these countries welcome McDonald’s? Why or why not? We would think that McDonalds would have trouble to locate in countries with very distant customs or rather reluctant to the American way of life. But the brand had a very good concept.
McDonalds was also a way for these countries’ population to eat copiously for small budgets. When McDonalds opens its first restaurant in Russia, the company creates its own supply chain, including farms, within the USSR. For political reasons, McDonald’s Canada was responsible for this opening, with little input from the U.S. McDonalds has managed to gain the trust of local authorities and local population by working with agricultural producers to develop local supply food sources. Mentalities and cultures have also evolved a lot, since the beginning of globalization. In
Asia, young people quickly join this way of eat, because it was much more modern. However, McDonalds didn’t deny the significant food’s customs: In 1996 when McDonald’s entered in India for the first time, it offered a Big Mac made with lamb called the Maharaja Mac.
3. At the end of 2003, McDonald’s announced it was selling the Donatos Pizza unit. Then, in 2006, the Chipotle chain was spun off. In light of these strategic actions, assess McDonald’s prospects for success beyond the burger-and-fries model. MacDonald’s wanted to reassert itself in its core business: burger and fries. So they decided to focus on their basic concept and to abandoned businesses they believed to be complimentary. This strategy of specialization allows:
An improvement of productivity
A leader’s statue in terms of innovations
An excellent market’s knowledge
To give clear brand’s identity and goals better defined
In doing so, they wanted to reestablish themselves as the reference n° 1 of burger & fries’ fast-food.
4. Is it realistic to expect that McDonald’s – or any well-known company – can expand globally without occasionally making mistakes or generating controversy? Why do anti-globalization protesters around the world frequently target McDonald’s?
I think that a company can expand globally without necessarily making big mistakes. But in this case, that company should invest a lot of money in marketing research upstream but also continually to be always aware of the local environment. The local as well as general decisions must take into account all collected data. Here is the reason why there are sometimes mistakes. It is an intricate process, which requires time and money. But it goes without saying, that each operation must be consistent with each marketing’s location.
Regarding McDonald’s, it is normal that all novelties proposed haven’t always been liked because country’s food, tastes and eating habits are very variable depending on each population. McDonald’s has been very performing in finding a basic menu that pleases almost everyone.
This is that power which has Mcdo, to standardize eating habits, that scares anti-globalists. In fact, food is often a dear element to ones who wish to preserve their cultural identity. Finally, I guess it is possible to be accepted worldwide, but it is risky to alter the traditions of the foreign country in which the company want to establish itself. Case 2: Acer’s strategy.
1. Acer’s strategy has been described as “divide and conquer.” Explain.
Acer, founded in 1976 by Stan Shih, is the fourth computer manufacturer in the world. The Taiwanese group is specialized in manufacturing and commercialization of computers, monitors and other computer peripherals. The different brands of the group are: Acer, Packard Bell, Gateway and eMachines. Contrary to McDonalds, Acer has opted for a strategy of differentiation rather than standardization. Indeed, when Stan Shih uses the phrase “divide and conquer” it’s to highlight the group’s decision to preserve the identity and personality of each group’s brand and to use the privileged relation that these brands have built over the years with their own customers: Packard Bell targets the general public
eMachines the large public “first price”
Gateway targets larger companies
Acer focus on mobility to attract both consumers and the SoHo market (Small office and Home Office)
2. How did the “global markets-local markets” paradox figure into Stan Shih’s strategy for China?
Stan Shih decision to focus on the Chinese market is quite paradoxical regarding the “divide and conquer strategy”: The word “divide” is a paradox because Acer wants to refocus on the Chinese market, so the target will be much more homogeneous. And on the other hand, “conquer” is not the interest here because Chinese are already conquered. So the strategy division is quite paradoxical as far as “local markets” are concerned, because the population is more uniform. But this strategy is maybe very successful too at a local level.
3. Can Acer become the world’s third largest PC company, behind Dell and Hewlett-Packard?
We can indeed imagine that Acer may become the world’s third largest PC company. Since the refocus of Acer in China, the results have been impressive. However, it must stand out from Lenovo. To grow its market shares, Acer must have a more global view and this will make the difference. If the group wants to change this ranking, he cannot restrain its strategy to the Chinese market. Acer should also improve its B to C, because it is more recognized in the world of B to B. Acer has to be more innovative and gain the trust of diverse populations.
4. Even before the current economic crisis deepened, growth in the U.S. PC market had begun to slow down. Despite strong competition from Dell and Hewlett-Packard, Acer’s U.S. market share increased from 1 percent in 2004 to 3.3 percent by the end of 2006. What are Acer’s prospects for gaining further share in the United States? It was difficult for Acer to enter in the US’ market: Dell and HP have a monopoly in the PC there.
The United States expansion is very closely linked to the merging with the American computer hardware manufacturer Gateway, while the European move is related to the acquisition of the Packard Bell company. Acer’s intention is to offer a wide range of computers: the decision to keep the different brands by checking that they don’t overlap is an ideal combination. EMachines offers cheap desktop, Acer made cheap laptops and Gateway is located in the midrange and high end. This is probably what has allowed Acer to increase its market share, and it is probably thanks to its cheap range that the crisis hasn’t had any impact on its growth in the United States.