McDonalds analysis

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This exercise examines the issue of McDonald’s business within the Chinese market, with an emphasis on the application of strategy, management and marketing theories.

1. Introduction

McDonalds is the world’s largest chain of hamburger restaurants, currently it serves around 68 million customers per day in 119 countries. One of the countries that it has moved to more recently is China; it opened its first restaurant in Shenzhen in 1990. This report will explore the various aspects associated with the move of McDonalds to China, including; the culture difference, the growth strategy, the marketing strategy and the competition it has faced.
McDonalds is an American company, it was founded in California in 1940 and still is synonymous with the American hamburger restaurant. As such, McDonalds had to adapt in order to enter the Chinese market with any hope of success. One way that it adapted was by changing the menu in China, quite often replacing beef products with chicken in order to appeal to the Chinese palate. Culturally, McDonalds has achieved two seemingly opposite responses from the Chinese consumer. One is the gradual acceptance of McDonalds; it’s efforts to understand the local culture has benefitted the chain; acts such as cooking chicken ‘the Chinese way’ and maintaining a constantly high standard of cleanliness in the bathrooms, has given McDonalds a strong reputation and allowed it to be accepted more easily. Secondly, in maintaining some of its standards, McDonalds has marked itself as a foreign, modern place for the Chinese youth to enjoy. In McDonalds restaurants there are tables with only 2 seats, which is drastically different to traditional Chinese restaurants which have larger tables of 8 or more. The large tables are associated with upholding traditional Confucian ideals, whereas the tables of 2 allow young Chinese to break away from this tradition, using McDonalds as a popular place for dates, allowing the couple to get to know each other, in



References: 3. Schumpeter, D.W. (2012). The battle for breakfast. The Economist. [Online] 23 October. Available at <http://www.economist.com/blogs/schumpeter/2012/10/chinese-fast-food> [Accessed at 10 April 2013] 4 5. Perepu, I.; Purkayastha, D.; Maseeha, S.(2009) “MCDONALD 'S IN CHINA” Published by IBS Center for Management Research 6 9. Lab Brand, 2010. Advertising Analysis: McDonald’s in China. [Online] Available at: < http://www.labbrand.com/brand-source/advertising-analysis-mcdonald’s-china-0> [Accessed 11 April 2013] 10 11. Best Sponsorship and Tie-in Campaign, 2009. [Online] Available at: <http://www.pmaa-awards.net/documents/Cat%202%20Best%20Sponsorship%20or%20Tie%20In%20Camp.pdf > [Accessed 9 April 2013] 12 13. Want China Times, 2012. McDonald’s adopts new approach for expansion in china. [Online] Available at: < http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20121103000012&cid=1102> 14

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