Global marketing: Antonia FICOVA
Case: McDonald´s expands globally while adjusting its local recipe
Antonia FICOVA
McDonald's Corporation is the world's largest chain of hamburger fast
food restaurants, serving more than 58 million customers daily.
1. Identify the key elements in mcdonald's global marketing strategy. in
particular, how does McDonald´s approach the issue of
standardization?
The key threats to McDonald’s domestically are the lack of growth opportunities. The
market is well saturated, and it would difficult to achieve double-digit growth. Other concerns
are a newfound emphasis on healthier eating. Most of McDonald’s most popular fare
probably in some small way contributes to the increasing incidence of cancer, heart disease,
and diabetes among the population.
But I feel the key threat to McDonald’s continued success is its very ubiquity. Because
McDonald’s are everywhere, the dining experience is never special. And as Baby Boomers
age and become more affluent, it is likely that they will leave behind their fast-food ways, if
only to step up to moderately priced restaurants like Olive Garden, Bennigans, and Pizzeria
Uno. These chains have the added advantage of serving higher-margin alcoholic drinks.
McDonald’s, meanwhile, has to continually battle Burger King and Wendy’s, which leads to
an erosion of margins for everyone. Even alliances with toy manufacturers, while popular
with consumers, do little for the bottom line because the cost to run these promotions can be
quite expensive.
Business model
McDonald's Corporation earns revenue as an investor in properties, a franchiser of
restaurants, and an operator of restaurants. Approximately 15% of McDonald's restaurants are
owned and operated by McDonald's Corporation directly. The remainder are operated by
others through a variety of franchise agreements and joint ventures. The McDonald's
Corporation's business model is slightly different from that of most other fast-food chains. In
addition to ordinary franchise fees and marketing fees, which are calculated as a percentage of
sales, McDonald's may also collect rent, which may also be calculated on the basis of sales
In other countries, McDonald's restaurants are operated by joint ventures of
McDonald's Corporation and other, local entities or governments.
As a matter of policy, McDonald's does not make direct sales of food or materials to
franchisees, instead organizing the supply of food and materials to restaurants through
approved third party logistics operators.
The key thing that McDonald’s operations strategy has to support is experimentation.
Now somewhat long in the tooth, McDonald’s needs a breakthrough that will provide new
avenues of growth. It has a long history of such experimentation, which has resulted in some
new profit centers like Chicken McNuggets and the breakfast menu. Some later turn out to be
duds like the McLean Deluxe, but inevitably experimentation in limited outlets offers
McDonald’s a way to retain its key strengths -quality and consistency, while continuing to
evolve for new palates and pocket books.
2. Do you think government officials developing countries such as russia, china, and
india welcome mcdonalds? Do consumers in these countries welcome Mcdonald
´s? Why or why not?
Probably yes, because this is strong brand name in the world, know how, good recipes.
McDonald's primarily sells: hamburgers, cheeseburgers, chicken products, french fries,
breakfast items, soft drinks, shakes, and desserts. In response to obesity trends in Western
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Global marketing: Antonia FICOVA
Case: McDonald´s expands globally while adjusting its local recipe
Antonia FICOVA
nations and in the face of criticism over the healthiness of its products, the company has
modified its menu to include alternatives considered healthier such as salads, wraps and fruit.
On the second site, we have to admit that daily consumption of fast food causes an
impact on our health. As stated in the Financial Times reporter: “WHEREAS, the contribution
of the fast food industry to the global epidemic of childhood obesity and to diet-related
diseases, such as diabetes, cancer and cardiovascular disease, have become a major public
issue …”. “RESOLVED: Shareholders ask the Board of Directors to issue a report, at
reasonable expense and excluding proprietary information, within six months of the 2011
annual meeting, assessing the company’s policy responses to public concerns regarding
linkages of fast food to childhood obesity, diet-related diseases and other impacts on
children’s health. Such report should include an assessment of the potential impacts of public
concerns and evolving public policy on the company’s finances and operations.”1
Business practices McDonald's penetrating virtually all areas of life of modern society,
and there can talk about mcdonalisation-work, family life, politics, travel, education and sex.
For understanding the effectiveness of the process for entering values into McDonald's
everyday life is important that this phenomenon affects only those sites that are interesting to
the American way of life. As if they formed a new, media-treated Imperium Roma-num,
which produces in every part of your living space the same values, by which it may be in
addition to the ubiquitous and popular entertainment products, fast food ...
Target customer groups are groups that live around, mcdonaldisation 'world (or
wherever has its McDonald's restaurants) ... they are usually teenagers, young people (the
most represented age group 14-29 years) and young families with children, it is rather the
liberal professions, entrepreneurs and students ... prefer a casual style, freedom and
spontaneity (free style), live a life oriented to the presence, love to spend time with friends,
cinema, shopping malls, have fun and spend ... recognize post-modern values, which we
could express the attributes, the new ',' modern ',' quick ', trendy','sexy','free'and'in' and ...
speaks the national language..
In the area of advertising McDonalds followed the trend of "radical nominalism”,
standardizing the brand's position in daily life - while traveling, dressing, leisure, and, of
course, even when eating. Mark McDonald's has become synonymous with fast food,
Kellogg's healthy breakfast, Colgate for healthy teeth, Armani fashion clothing, Casio at the
exact time, Sony for quality listening, Gillette for safe shaving, Volvo for safe driving, Durex
for safe sex.
3. At the end 2003, mcdonalds announced it was selling the donato 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.
Most standalone McDonald's restaurants offer both counter service and drive-through
service, with indoor and sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and Drive,
or "McDrive" as it is known in many countries, often has separate stations for placing, paying
for, and picking up orders, though the latter two steps are frequently combined. To
accommodate the current trend for high quality coffee and the popularity of coffee shops in
general, McDonald's introduced McCafé, a café-style accompaniment to McDonald's
restaurants in the style of Starbucks. Some locations are connected to gas
stations/convenience stores while others called McExpress have limited seating and/or menu
1
http://blogs.wsj.com/health/2011/03/04/group-of-nuns-asks-mcdonalds-to-consider-childhood-obesity/,
[5.03.2011]
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Global marketing: Antonia FICOVA
Case: McDonald´s expands globally while adjusting its local recipe
Antonia FICOVA
or may be located in a shopping mall. Other McDonald's are located in Wal-Mart stores.
McStop is a location targeted at truckers and travelers which may have services found at
truck stops.
Competitors:
 Burger King - Second largest burger chain
 Subway (restaurant) - Largest single brand restaurant chain
 Yum! - Largest multi-brand restaurant chain
McDonald's advertising
"I'm lovin' it" redirects here. For the Justin Timberlake single, see I'm Lovin' It.
In Spring 2008, McDonald's underwent the first phase of their new image and slogan:
'What we're made of.' This was to promote how McDonald's products are made. Packaging
was tweaked a little to feature this new slogan. In Fall 2008, McDonald's introduced new
packaging, eliminating the previous design stated above with new, inspirational messages, the
"i'm lovin it" slogan. (appearing only once on most packages). McDonald's also updated their
menu boards with darker, yet warmer colors, more realistic photos of the products featured on
plates and the drinks in glasses. In 2009, McDonald's expects to have all of this nationwide.
Celebrity spokespeople: Michael Jordan, Kobe Bryant, Charles Barkley, Venus
Williams, Destiny's Child (2004–2005), Justin Timberlake (2003), Ashanti (2003).
McDonald's has become emblematic of globalization, sometimes referred to as the
"McDonaldization" of society. The Economist newspaper uses the "Big Mac Index": the
comparison of a Big Mac's cost in various world currencies can be used to informally judge
these currencies' purchasing power parity. Scandinavian countries lead the Big Mac Index
with four of the five most expensive Big Mac's. Norway has the most expensive Big Mac in
the world as of July 2008, whilse the country with the least expensive Big Mac is Malaysia.
4. Is it realistic to expect that mc or any well known company - can expand
globally without occasionally making mistakes or generating controversy? Why
do globalization protesters arround the world frequently target McDonald´s?
Legal cases
McDonald's has been involved in a number of lawsuits and other legal cases, most of
which involved trademark disputes. The company has threatened many food businesses with
legal action unless they drop the Mc or Mac from their trading name. In one noteworthy case,
McDonald's sued a Scottish café owner called McDonald, even though the business in
question dated back over a century (Sheriff Court Glasgow and Strathkelvin, November 21,
1952).
It has also filed numerous defamation suits. For example, in the McLibel case,
McDonald's sued two activists for distributing pamphlets attacking its environmental, labor
and health records. After the longest trial in UK legal history, McDonald's won a technical
victory for showing that some allegations were untrue. The McLibel Case was also a massive
public relations disaster for McDonald's, as the judge also found that while more than half of
what was on the pamphlet was truthful, much of the information simply the opinions of the
activists and therefore non-prosecutable.
McDonald's has defended itself in several cases involving workers' rights. In 2001 the
company was fined £12,400 by British magistrates for illegally employing and over-working
child labor in one of its London restaurants.
Possibly the most infamous legal case involving McDonald's was the 1994 decision in
The McDonald's Coffee Case.
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