Mcdonalds Caase Study

Assignment Brief/Scenario

Burgers & Coffee вЂ" Well, all of us know of these two. Very close to our heart and something that’s a great way to hang out with family & friends.

Well, we all know of McDonalds and Starbucks, don’t we? Lets try to learn a little more about them вЂ" what is their strategy and how have they become a global brand.

Give a brief introduction of McDonalds and Starbucks. Not more than 5 lines each.

Task One

• Give a brief introduction of McDonalds - Not more than 5 lines.

o Globalization of McDonalds вЂ" Discuss in detail

• Give a brief introduction of Starbucks - Not more than 5 lines.

o Globalization of Starbucks вЂ" Discuss in detail

Task Two

Compare the globalization approaches of Starbucks & McDonalds The parameters to be used for this comparison are:

• Cultural Environment

• Economic Environment

• Political & Legal Environment

• Any other parameters

Task Three

Situational Analysis

McDonald's is planning to capitalize on the public's willingness to pay $4 for a cup of coffee by hiring baristas and dropping espresso machines in 14,000 of their fast-food outlets. Meanwhile, Starbucks, with business lagging, is fighting back with an "if you can't beat 'em, join 'em" strategy, by offering heated breakfast sandwiches and adding drive-thru windows to some of their locations.

These two chains as polar opposites вЂ" one designed as a sophisticated faux living room where customers could get a decent coffee drink and read their newspapers; the other, a riot of plastic-and-vinyl booths and bright fluorescent lighting where meals are counted in billions served. Is it really possible for these two worlds to collide?

Assume you are a business manager at either one brand (either McDonalds OR Starbucks). What would be your strategy towards this situation.

“Mention the brand that you are choosing for task three in the title of the task”

(I) Task One : Brief note on McDonalds

McDonalds is one of the world’s leading fast food franchisee. They mainly concentrate on burgers with occasional additions with to suit the host country. They have designed meals targeted at adults to toddlers so as to reach wider range of audience. They operate in more then 119 countries and serve around 52 million customers per day which makes it a global brand.

Globalization of McDonalds

Globalization is the interlocking of different countries in the world in a political, economic, social and technological sense. People around the globe are more connected to each other than ever before. Information and money is exchanged at an alarming rate. Goods and services produced in one part of the world are increasingly available in all parts of the world. International travel is more common compared to earlier times. International communication is commonplace. This phenomenon has been titled "globalization."

McDonalds Restaurants: Number by Region

1991 & 1996

Table

Graph by Benjamin Holt, August 1999

Source: Human Development Report 1998 (www. global policy.org)

The graph gives an example of how Mcdonalds have opened branches in various locations in such a short span of five years.

Mcdonalds is a brand in itself and there hardly will be anyone who is not aware of their existence. The burger is an American food but Mcdonalds have gone to prove that it is accepted by 52 million people and is still going strong. For instance they incorporate the host nation’s selection of taste and individuality so as to be accepted as fast food retailer. For example when the Asian countries are observed (China, Hong Kong, Japan, Taipei, South Korea) McDonalds success around the world is due to its franchising way of business and hiring local management. In most of the countries over 50% of the employees in management are locally hired which enables Mcdonalds to adapt to the local style, to the point where many would almost consider McDonalds a local brand.

Examples

To some countries McDonalds may be considered as a luxury food retailer where income may be as low as $2000 and when compared with the American price it definitely bends to the pricey side. To maintain a customer base they sell local dishes, such as seaweed burgers in Japan. In a country like India they rely heavily on potato being a vegetable as majority of the population are vegetarian. To add to the offering the French fries are usually served with interesting mix of sauce specially to cater to the taste. In France, they will occasionally sell rabbit and wine. This in short dispels the luxury food symbol and confirms that it is an affordable eat out.

o In Taiwan they sell lunch boxes in reusable metal containers, in the style Chinese school kids have been using for hundreds of years.

In Hong Kong, McDonalds introduced the western concept of queuing orderly. Before, people would push and shove.

o In China, the McDonalds introduced standards of cleanliness in kitchen and bathrooms unheard of in that country. Since the kitchen is exposed to the customers, cleanliness became important. This is now spreading to other restaurants in the country as well.

o Employees in these chains are typically filled with pride. McDonalds in China hires greeters that often form relationships with the children that frequent the establishment.

Source : McDonalds: Paragon of Globalization(www.epinions.com)

(II) Task One Brief note on Starbucks and its globalization.

Starbucks