1. Globalization of McDonald’s
Angela Garcia Aker
Daniel Bergin
Tithi Dutta Roy
Celine Manoosingh
Silvana Osorio Vanhouten
Derek Sullivan
Principles of Engineering Management
Fall 2009
11/30/2009

2. McDonald’s: An Introduction
Founded in 1940 by brothers Dick and Mac McDonald.
Sold to Ray Kroc in 1961 for $2.7million
“Salesmanship is the gentle art of letting the customer have it your way.”

3. Ronald McDonald introduced in 1965.
Globalization began is 1967 with first international restaurant in British Columbia.

4. Drivers behind McDonald’s Globalization
Drivers for company globalization
Increase profits and customer base in new markets
Decrease labor costs
Get access to new sources for raw materials
Drivers against company globalization
Domination of local economy, getting tax breaks
No respect for local customs
Hiring most talented personnel from that country
No transfer of advanced technologies

5. Drivers behind McDonald’s Globalization
How locally owned franchises are run
Subsidiary of US (i.e. Australia)
Joint venture partner with US (i.e. India)
Support for McDonald’s in the book Golden Arches East (from Global Policy Forum article)
Respect for local culture
Locally owned franchises
Buying ingredients from local communities
Altering regional menus to conform to local tastes
Opposition against McDonald’s
Anti-McDonald’s Day every October 16
Jose Bove, the French farmer
McDonald’s vs. McCurry in Indonesia

6. McDonald’s Marketing and Customer Service
Must satisfy customers while maintaining their identity
Most countries see McDonald’s as an American restaurant serving American food
To fit in, customer appearance was adjusted for each country
Had to recognize the resistance for their entry and have a solution to it
Offensive food practices
“Fast” food away from the family table

7. McDonald’s Marketing and Customer Service
Keys to success
Maintaining image of a “family” environment
Adjusting décor to specific culture
Makes restaurant feel like a local establishment
Food choices for target customers
Maintaining good customer relations
Sometimes is much more difficult than in the U.S.
Russia had a difficult time maintaining good customer service

8. McDonald’s International Food Variances
Must be able to adapt to wide spread of cultural differences and local cuisines
Operates in 118 countries serving 47 million customers
Over 60% of revenue comes from international market
US market considered saturated, more opportunity abroad
Accommodate Religious and Cultural Differences

9. McDonald’s International Food Variances
India
No beef or pork, instead Halal chicken, lamb, and fish
Vegetarian centric menu with meat prepared separately
Japan
Seafood items including Shrimp and Teriyaki Burger
Seaweed, Barbeque or Italian Basil flavored French Fries
McDelivery Service offers 24 hour delivery
Europe
Greek Mac (Big Mac in a Pita)
Metric system means Quarter Pounder is now the Royal
Beer is served in France, Netherlands, Germany and Austria

10. McDonald’s International Food Variances
South America
Kosher branches in Argentina use BBQ Grill instead of frying
Venezuela offers empanadas and burritos
America
New England serves seasonal crab cakes and lobster rolls
Midwest serves Johnsonville Brats
South offers Cajun McChicken Sandwhich
Hawaii serves saimin and the Spam McGriddle Sandwhich

11. McDonald’s Global Marketing Strategies
Different cultures require diverse marketing approaches
Cultures differ on many factors such as language, clothing, architecture, sports, cuisine and religion.
How to impact different regions of the world
understand their culture
what attracts that culture
implement different methods for each
delivery of the message
McDonalds- Advertising Across Cultures

12. Latin America vs. Asia Latin America East Asia
-Ad mainly focused on family - the centerpiece of the Latino Culture
-Ad Description: Father and son talking about life
- The style and rhythm employed in the music of the commercial recalls times of happiness and enjoyment, and goes along with the visual part of the ad.
East Asia
-Ad intended for young people and fashion lovers
Ad Description: Young teenager, fashionable
-Also, race plays a role. They Japanese ad uses an American looking model instead
- Teenagers in Asia respond to American culture and looks.

13. Economic Success Overseas
The first McDonald’s appeared in 1940
McDonald’s began internationalizing in 1967
McDonald’s is rapidly growing in Europe, more than 6,200 restaurants in 51 countries
In China they had to close 175 different restaurants due to low employee performance
in Venezuela when they shut down all of the stores in Venezuela for 48 hours due to irregularities in the financial books of the fast- food chains.

14. Economic Success Overseas
Some of the countries where you can find McDonald’s are Australia, Austria, Belgium, Brazil, Canada, China, Colombia, Denmark, Egypt, France, Germany, Greece, Guatemala, Mexico, Peru, Portugal Singapore, Taiwan, United Kingdom, Uruguay, and Yugoslavia
McDonald’s is doing quite a bit to get in charge of the growing market. McDonald’s really knows how to do business because they keep even control levels between franchise and franchisee. It also shows how McDonald’s has been able to overcome the problems that can happen during the internationalization.

15. In Summary
McDonald’s is one of the best examples of globalization out there
Successfully responded to
Drivers for and against globalization
Cultural differences through marketing, customer service, advertising, and food choices
McDonald’s has had great examples of success overseas
Interesting to witness McDonald’s next steps and if it can maintain worldwide status