4. GLOBALISATION AT McDONALD’S2
4.1 Industry Based view2
4.2 Resource Based View3
4.3 Institution based view3
5. Evaluation of Market Entry Strategy into Uk4
6. STRENGTHS OF THE MARKET ENTRY STRATEGY5
7. Conclusion and Recommendations7
7.1.1 Local Sourcing8
7.1.2 Healthy Food8
AN EVALUATION OF THE MARKET ENTRY STRATEGIES ADOPTED BY McDONALD’S IN UNITED KINGDOM 4. GLOBALISATION AT McDONALD’S
The purpose of this study is to critically evaluate the market entry procedures that were followed by McDonalds in their entry strategies in United Kingdom. The researcher would focus the study on the activities that are undertaken by McDonalds in their growth strategies. The methodology that would be adopted by the researcher would be that of deductive approach where the data is analysed based on the proven theories that are existing in the areas of market entry. There are three ways through which the strategy can be analysed and they are Industry based view, Resource based view and Institution based view. 4.1 Industry Based view
The industry based view has been defined by Peng (2007) as the initial understanding of the company in terms of the operations that it undertakes. Like whether it is in high-tech or low-tech. Some industries are location bound and others are non-location bound. For example in the case of semi-conductor chips the location does not impact as the customers would not have any preference to where they are manufactured. However, in the case of foods they may have certain preferences, hence location becomes important. In the case of McDonalds, as the company operates in the food industry, the raw materials that it sources and the manufacture coupled with the location becomes important for this kind of industry. When the company entered the United Kingdom market in the 1970s consumer awareness towards local sourcing was not so prevalent. However, with the advent of globalisation and the associated issues surrounding global warming and the inherent linkage to local sourcing has created the necessity. These factors have necessitated the need for the company to look towards sourcing their products locally and also at the same time ensure that the produce meets the needs of the consumers through the delivery mechanism that they have adopted.
4.2 Resource Based View
The resource based view is another element in the strategic tripod where the strategic resources that are available to the company are reviewed. The resources of a company can be identified through the various advantages that they offer like being valuable (Mahoney and Prahalad, 1992); rare (Barney, 1986); In-imitable (Conner and Prahalad, 1996); Non-Substitutable (Barney, 1986). From the above it can be seen that the resources can be of variable nature especially in the case of McDonalds the distinctive advantages in relation to the above identified factors are as follows. The value of the brand in itself offers a great differentiation in the market place for the company. Even though the products are not rare the service is becomes the differentiator for the company to sustain their operations. The service as a commodity cannot be easily imitated by the competition and hence service becomes a resource that the company can utilise in the strategic scope. The product being fast food is non-substitutable as it is necessary for all the customers. These distinctive advantages enable the organisation to ensure that the products that they are offering meet the needs of the customers and ensure that they are able to offer strategic position to the company.
4.3 Institution based view
The last element in the strategic view is the aspect of institutional rules or the restrictions that are prevalent in a country. The rules and restrictions may create a disadvantage for newcomers in a new country. There needs to be a clear understanding of the rules and regulations in...