MBM-543 Additional Case Assignments Deepika Singh

(157617)

McDonalds: Serving Food around the World

Q1. What opportunities and threats did McDonalds face? How did it overcome them? What
alternatives could it have chosen?

During McDonalds earlier stages of growth the trend of fast food eateries was still at its infancy, and
almost 99% of the worlds population were possible customers, during that time McDonalds saw
opportunity in countries such as China which had a population of 1.2 billion (currently 1.3 billion) for
further expansion. In Chinas capital Beijing McDonalds took the initiative of finding a populous region,
taking in factors such as whether the citizens were above middle class etc. ever since it opened in 1992 it
attracted some 40,000 people. It catered to different types of customers such as those of advanced age,
broadened menus for the health conscious. It took a first movers initiative to become a family friendly
restaurant welcoming children and entertaining them, plus it promise of fulfillment of QSC & V further
popularized McDonald.
There was general concern of when taking on a new venture as it could either be very profitable or a risky
experiment, when expanding to new countries they need to follow their laws and be understandable of its
culture, through careful planning and upholding QSV & V they can get well established. There was also
competition from others such as KFC, Pizza Hut, Wendys etc. by staying one step ahead and heavily
advertising, taking first movers advantage. McDonalds has managed to stay ahead. McDonalds had to
make some concessions on unavailable inputs which made their brand famous. i.e., it was difficult to
produce Idaho potatoes due to special soil requirements in Europe, which was used in preparation of
French fries as an alternative they could use other potatoes that were locally available and improvise on
the recipe.

Q2. Before McDonalds entered the European market few people believed that fast food could be
successful in Europe. Why do you think McDonalds succeeded? What strategies did it follow? How
did these differ from its strategies in Asia?

McDonalds succeeded since it was one of the first restaurants to welcome children and thus created the
image of a family restaurant, not only were children warmly received they were entertained with crayons
and paper, a play land, and also by the clown Ronald McDonald, who could speak 20 languages. Thus it
targeted the young as a potential growth opportunity. McDonalds golden arches promised the same basic
menu and QSC&V (Quality Service Cleanliness and Value) in every restaurant. It is also brought better
cooking procedures and smarter kitchen layouts with strict controlling. Asia was viewed as a potential
customer but with so much diversity, customs and traditions it became a challenge. Japan was one of the
Big Six that provided McDonalds with over 80% of international operating income, china was a
country with a large population of 1.2 billion currently there are many franchises in China. Marketing
strategies had to be changed for example in Japan a burger is considered a snack and should be sold as
such.
MBM-543 Additional Case Assignments Deepika Singh
(157617)

Q3. What is McDonalds basic philosophy? How does it enforce this philosophy and adapt to
different environments?

McDonalds basic philosophy is QSC & V (quality, service, cleanliness, and value). The QSC & V
contributes to the care of the customer, the customer is the most important person of all. Ray Kroc
initially popularized McDonalds due to the standard of the food offered, all its products, handling and
cooking procedures, and kitchen layouts are standardized and controlled. To attain Quality, quality
assurance centers are located in the United States, Europe, and Asia. In terms of service McDonalds
generates employment, it values customer care above all, it even includes training, and Hamburger
universities in the United States, Germany, Britain, Japan, and Australia teach the necessary skills in 22
languages with the aim of providing 100 percent customer satisfaction. It caters to every age as well and
promises QSV&V to be present in every establishment. McDonald is popularized brand it fulfills
promises to maintain customer satisfaction and has become familiarized by the people, thus wherever
they are established or plan to establish they are welcomed and adjust easily