McDonald's Global Expansion and Challenges

Introduction

Marketing strategy involves the deliberate plan laid by an organisation in the attempt to explore a greater market for its products and services (Ferreira, Pessôa, and Dos Santos 2016). Companies and organisations have a sequence of growth, which ranges from local to international and global markets. At the local level, the organisation mostly reaches its products to the locals. It has not gained stamina in term of market. The market expands as the company grows, such that at some point the products get demand beyond the local setting. A maintained growth sees a company growing to the universal or global level, where the products and services are not only known but are also in demand. This process of growth and expansion from the internal and local level to the universal or global level is called globalisation (Finoti, Didonet, Toaldo, and Martins 2017). McDonalds is a fast-food company, which is was first started as a local fast-food restaurant in California. The company has since grown to currently being among the most developed and widespread companies. McDonalds has restaurants all over the world starting from the States, India, Japan, France, China, Indonesia, among other countries. The growth of this organisation can be accounted for, and the stability of the organisation can be attributed to several growth strategies.

Aim

This paper is intended to discuss globalisation in McDonalds cooperation, evaluating the factors that have favoured globalisation, and assessing challenges that the organisation has faced in the process.

Objectives

1. To investigate the factors that have contributed to the growth of McDonalds

2. To explore the challenges that the organisation has faced

3. To conclusively establish that McDonalds has succeeded in globalisation

Methodology

The paper is based on review of secondary sources including scholarly journals and reports published by the organisation. These sources are all referenced at the end of the paper. The findings are discussed in details to draw a well-supported conclusion.

Discussion

Factors that have led to the growth of McDonalds

To begin with, one of the very key factors that have led to the growth of McDonalds is planning and implementation, as well as creativity and innovation. Close to this is the 5Ps of strategic planning (TB 2018). These represent the five elements of an organisation, which are place, promotion, people, product and price. These elements are related and interdependent, and are explored so as to enhance growth of a company. Place refers to the physical positioning of the company (Rondović, Djuričković, and Kašćelan 2019). Place should be strategic, in that it should be open to access by consumers of the product. McDonalds is situated in many countries, where in most cases it is within the capital cities or major cities of the host countries. For example, it was founded in California, which is a major state in America. Promotion refers to the deliberate means that a company uses to make its products known to the public. It involves making the company and its products known to the potential market, such that this public not only buys the available products but also checks out for new developments. McDonalds has been involved in various promotional activities such as sponsoring Olympics (McDonald 2018). Due to the universal nature of the Olympics, McDonalds explores the opportunity of exposure to the entire world. Also, the organisation partners with other known organisations such as Red-Cross, Global Summit of Women, and Asia Society. These further expose McDonalds to a potential market.

People refers to the specific feature of the target population. The element of people is a new development in the study of strategic elements, which has proved effective to the growth of organisations such as McDonalds. The characteristics of the population inform the features of the product (Hamdan 2019). The population is surrounded by a culture, where certain nature of products is in higher demand than others. As a result, specific aspects of the local culture informs the nature of the products to be offered. In McDonalds, there are common menus that cut across all restaurants across the countries. In addition to these common dishes are other dishes that are specific to the people that live in the immediate culture. For example, McDonalds opened a vegetarian restaurant in India to serve the almost 40% citizens who do not take meat at all (UK Essays 2013).

Product is the very entity on sale (Fu and Elliott 2013). The product is the trademark of the company, meaning that a company will be known according to the products that are offered. There are chances that a product is offered by several organisations, which directly translates to competition. The uniqueness of the product of one company distinguishes it from the products of the other companies. This results to an added advantage, because the uniqueness provides the ‘face’ of the company. Food, for example, is a product that is widespread across the globe. However, other organisations tend to struggle in the attempt to remain relevant to the immediate culture while at the same time incorporating foreign dishes. This art of incorporating foreign cultures to the local culture is one of the strongholds of McDonalds, because it allows the restaurants to serve the locals as well as outsiders with the same enthusiasm. For instance, milkshake is one of the signature items that the McDonalds restaurants offer across the globe. However, in New Zealand, the local lamb meat is also offered. As a result, a native that visits the restaurant will be equally satisfied with the local delicacies as a foreigner would enjoy finding their own food on offer in that restaurant.

Finally, price is the cost of the product. It involves the cost of production, the cost of delivery to the customer as well as the profit margin achieved through the sales of the product. Within this element, the organisation compares the total cost with the returns. It is the responsibility of the organisation to ensure that the product is made available at the most convenient price, which is also competitive. The price should match the quality of the product because the consumer is interested in the value for their money. The prices at McDonalds are way friendly to any customer, with the menu being a clear evidence of the interest to give the best food at an affordable and reasonable price (Millson 2013).

Among other key factors that have contributed to the globalisation in McDonalds include activities within the organisation such as slogans, objectives and culture. McDonalds cooperation has a popular slogan, ‘I’m living it’. This slogan is a mime of the reactions of the consumers to the food varieties offered in the restaurants. Such slogans tend to trend and get popular with the public, and in the process the organisation and its products also become popular. This later translates to more sales (Solomon et al., 2014). Still, McDonalds’ values the customer. The reaction of the customer is upheld, and this is evident through the decisions that are made as well as subsequent changes in order to fit into the preferences of the customer. A good example is the preparation of local dishes, with the specified procedures, which are sometimes challenging. For example, there are rules that restrict the field of food services. Such include the religious bans, where some religions ban certain foods to their followers. In such cases, McDonalds has adjusted by all means so that every customer from every culture is satisfied with the services offered.

Franchise management of the organisation in most countries helps to sustain the culture of the organisation. With the French culture forming the basis of the restaurants, the management has worked by all means to sustain that culture. For example, where the chosen managers of the various restaurants are not Franchise, then they are trained and equipped such that they are well exposed to the French culture with French food as the primary characteristic. Also, workers are trained to efficiently and perfectly prepare French dishes as well as be flexible to fit into diverse cultures of the world (TWPJ 2012). This puts McDonalds restaurants at a competitive state, where growth is constant leading to expansion of the organisation.

Still, McDonalds focuses on winning. In other words, being the best option there is and maintaining that position has facilitated the sustained growth to the global level. The organisation recognises the place of other organisations in marketing the products. In relation to this, the organisation is in partnership with several organisations that further expose the restaurants and their services. For example, a Red Cross camp can be served food by a nearby restaurant, where the public also encounters the organisation and its products at a close distance. The close distance facilitates interaction between the organisation and the public, which further widens the scope of influence (Thorson and Moore 2013).

PESTLE analysis provides facts in terms of political, economic, sociological, technological, legal and environmental factors. This analysis points out the contribution of these factors to the growth of the organisation (Gause 2016). In the case of McDonalds, the most distinctive factors are the economic and technological factors. Economic factors include the reported food inflation in China and the economic growth in individual countries. China is one of the host nations of McDonald’s restaurants, where the reported shortage of food led to increases profits on the food industry. McDonalds profited in the process (UK Essays 2013). Still, economic growth has been reported in some countries such as Indonesia. This growth subsequently caused increased profits on the restaurants in Indonesia. Technological advancements in this organisation include the development of more efficient kitchen equipment, which make work easier and the working environment favourable. For example, energy renewal schemes are in use in order to manage energy; hence, managing the cost of production (Medhora 2017).

Challenges that the organisation has faced

However, challenges such as the brexit and legal factors. Brexit has affected the relations between Britain and other countries, which has further led to economical strains. For example, the McDonalds restaurants within Britain suffer the subsidence of the pound in value, as well as increased rates, tariffs and dues that are involved in international business (TWPJ 2012). Still, legal issues have also affected the restaurants in various countries and regions. For example, there is a requirement of the law that any business, especially food business that is operating in Islamic countries should have a HALAL certificate. The procedures involved in the acquisition of that certificate as well as the conditions surrounding such businesses in such regions are strict and expensive to adhere. Some organisations may even count it unworthy the hustle. For example, the religious laws are specific even to the very preparation of the food. Still, the health awareness that has gained momentum across the French countries is another threat. The increased cases of obesity due to unhealthy eating have affected the business of fast foods, which are suggested as the major causes of obesity. This is because most of these foods are prepared through deep-frying, for example, fries (The Guardian 2018). This has affected the sales in the restaurants that are based on such countries. The stability the McDonalds has gained over the years has played a big part in sustaining the organisation despite such challenges that otherwise choke related businesses (Rao-Nicholson and Khan 2017).

Conclusion

Globalisation is evident in the sequential growth of McDonalds restaurants from a single unit in California to the current universal business, which is among the most widespread and stable businesses worldwide. This growth can be attributed to various factors surrounding the business, as well as within the organisation (Durie and Imiru 2018). For example, the 5Ps represent place, promotion, people, product and price. These are the basic elements, which can be explored strategically to support the growth and expansion of a business. Other factors such as the environmental and economic factors support the business externally; hence, strengthening the foundation of the business further. Despite challenges in the global market as well as local issues, the already established stability of McDonalds sustains its position among the top organisations of the world, especially in food industry. For example, the brexit is an internal issue in Britain, which results to overall loss to the restaurants that are in the affected countries; hence, the whole organisation is affected. However, McDonalds restaurants rise above these challenges, thus still remains unshaken.

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