Strategic frame work — macdonald 3 Essay Example
McDonald’s Case Study
McDonalds is an American fast food chain of restaurants that was founded in the 1940’s. Over the years the company has continued to grow and is currently one of the largest restaurant chains serving in 119 countries all over the world. This paper analyses McDonald’s inception in to India by way of a SWOT analysis, competitor analysis and their international strategy since the 1900’s. A SWOT analysis determines the strengths, weaknesses, opportunities and threats that face an organization so as to allow for better strategic planning and management. Looking at McDonald’s and their entry into the Indian market in the year 2001 we find that they were faced with a number of positive and negative influences during their inception.
For their strengths we find that the company is one of the largest and well known brands in the world and are known for their good marketing strategies that cause awareness of their brand name. They are also a trusted name and hence people are comfortable buying from them. Their profits margins are ever rising meaning they have a lot of money to support the opening of other branches in other countries and to sustain operations before the branches fully pick.
During their entry in India the company was not making any profits which led to skepticism over their ability to manage themselves in the Indian market and also their capability of spending lot of money in advertising to help the brand name gain recognition in India.
India’s population reaching up to nine hundred and fifty million people meant that there was a huge opening for the sales of their fast foods. Their growth rate was ranked second to China’s and they were the fifth largest economy in the world showing promising progress for international businesses entering the Indian market.
Threats included the anti western factions that were opposed to the entry of western international companies into India which was what led to their colonization by the British. Environmentalists were also present and opposed the entry of fast food restaurants such as KFC and McDonald’s due to the unhealthy lifestyles their foods promoted.
During their entry into India the fast food market was not developed owing to a number of facts that included the limited purchasing power of the people. Most of them were poor and as such lived within their means and could not afford expensive meals at McDonald’s. The larger population was also vegetarian and most people were not open to the meat culture and as such their adaptation to meat was slow. The company’s competitors in the market were mainly KFC, wimpy and Pizza Hut. These competitors had trouble making an entry into the Indian market due to their lack of understanding of the local tastes in food, overpricing their products and overestimations on potential demand of their products. Some branches like the KFC had to close at some point due to having too much monosodium glutamate in their foods. Their late entry into the Indian market was also attributed to factors like limited purchasing power of the people and the closed economy of the country.
Their international strategy has succeeded because they take in to account the culture of the people and what they like to have for their meals in the different continents where they have opened branches. Then they strategize and come up with product adaptation methods that fit the local tastes and cultures. It was evident in India where they removed the beef from their Big Mac hamburgers and instead put mutton so as not to offend the people (Pangarkar et al 120). They also incorporated vegetarians and included vegetarian menus with color separations on counters in every restaurant. Green was for vegetarians while the color purple was for non-vegetarians. They also made changes in their prices to accommodate the limited purchase power of the people. Their meals had lower prices than those in KFC, Pizza Hut or Wimpy and were even lower than those in Pakistan and Sri-Lanka. They also rolled out special promotions for combo meals and vegetable nuggets with low prices and huge quantities of food so as to entice new customers into buying their products. They positioned themselves as a family restaurant offering low prices than other restaurants. The special promotions and price changes were influenced by their competitors in the market. In choosing which countries to enter they checked various factors such as the levels of income in the leading cities and their exposure to foreign food and culture which has been their strategy since the 1900’s and is seen to be doing just as well even in recent times. The positive spillover effects in regards to their good reputation also go a long way in attracting new clients.
Pangarkar, Nitin, and Saroja Subrahmanyan. (2011)»Beefing up the beefless Mac.» pp 120-127
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