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McDonald’s opened its first store in India at Vasant Vihar in Delhi, which is considered a very affluent residential colony in Delhi. In 1997, it had opened its first drive through restaurant in Meerut. After this, there was a rapid increase in the number of McDonald’s outlets in India. Initially, there used to be long queues for getting their desired options for food from the outlet. Slowly the Indian consumers started to accept the new quick service restaurant. The outlets were crowded with mostly youngsters as they were more comfortable with the offering McDonald’s has to offer. There were many factors which led to the growth of McDonald’s in India. Some of the factors can be listed as below:
Growing Income: The GDP of India has been increasing
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The population living in the urban areas has increased. People from the rural parts of India are constantly moving to the urban areas in search of jobs and better opportunities. With urbanization comes greater market to McDonald’s products as they are cheap and cater to mass needs.
Standardization and Localisation: What McDonald’s is very good at is their standardization of products. The burger and fries taste the same whichever part of India or world you may go. When McDonald’s came to India, it dropped its beef burger from its menu as it wouldn’t have been acceptable by the Indian audience. They rolled out the Aloo tikka burger just in India for the taste of Indians. McDonald’s has achieved perfect globalisation with its
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McDonald’s has made it obligatory for anyone wanting to own a McDonald’s franchise to join a course where they are trained on the main operations of a McDonald’s store. These events are split into operations in the McDonald’s kitchen and employee management. The course aims at guaranteeing that the food quality at McDonald’s store is not negotiated and there remains proper working order in all stores. The store décor and architectural design are consistent in across countries globally. In order to maintain the quality of supplies, McDonald’s has preapproved list of suppliers that all franchisees must stick to
According to Royle (1999) McDonald’s is a very large multinational enterprise (MNE) and the largest food service operation in the world. Currently the company has 1.5 million workers with 23,500 stores in over 110 countries with the United Kingdom and Germany amongst the corporation’s six biggest markets, and over 12,000 restaurants in the United States. In 1974 the United Kingdom corporation was established and in 1971 the Germany corporation was established, currently the combined corporation has over 900 restaurants and close to 50,000 employees in each of these countries (Royle, 1999).
Have you ever wondered how the business empire of McDonalds was started? With over ninety nine billion served, it was started in 1940 in San Bernardino, California. It was started off as just a Bar-B-Q that served just twenty items. Its first mascot was named “Speedee” They eventually realized that by setting up their kitchen like an assembly line that they could be much more productive and get their food done faster, with every employee doing a specified job; the restaurants production rate became much higher. A milkshake machine vendor came into their small restaurant one day, his name was Ray Kroc. He saw how much potential the restaurant has, so he bought it out and opened one of the first franchises. Within the first year of Ray Kroc buying it, there were one hundred and two locations all around the world. McDonalds currently is one of the largest fast food restaurants in the world and currently has served over sixty four million customers through one of their thirty two thousand sites. It has almost become a way of life for America. Though, McDonalds started off as a small business between two brothers, it grew into one of the largest restaurant franchises in the world and greatly affects our society and how we eat our food.
McDonald’s has proven over time that the business practices they utilize work well and have led them to obtaining the title of the largest food retailer in the world. The founder of the company made a tactical decision in franchising the idea of providing fast food at a cheap price. Today, fast food has become a staple of not only American life but a viable food option all over the world. For McDonald’s a critical factor in them reaching the level of growth they currently experience has been franchising. It can be assured that McDonald’s will continue to grow through the usage of the franchising techniques as new food markets continue to develop all over the world.
However, quality is not fully valued by these points. In fact, McDonald’s operates with a consistent quality product. It can be determined by supervising the operations of any McDonalds’ restaurant. The company has certain standards of cooking dishes, if it is volume oriented and each customer impact on product is not so high, McDonalds pertains to the top-quality operation. On the other hand, McDonalds doesn’t compromise its consumers’ comprehension about quality. From the whole history of the company, it is known that this restaurant has gone through the big quantity of quality inspections in all countries, where its restaurants are located. Evidently, they have credible and verified suppliers. Moreover, McDonalds has a special Quality Assurance team that controls the quality of the product at all stages of production. (Vignali, 2001)
McDonald’s target market is conscious of budget and is made up of those who is looking to stretch a dollar while still getting the quality food in clean environment. One of the main market segment of McDonald’s is the youth and the family with young children. Most of McDonald’s locations have indoor playground to attract the families with young children. It offers economic way to spend quality family time without stretching their budget. McDonald’s failed attempt at Angus burger is a prime example that McDonald’s target market is not the high end premium dining but the value driven, simple, and convenient food
McDonald’s is one of the popular fast food chains in Hong Kong and the success of McDonald’s is due to it is able to create a homogeneous “global” culture that suit to the demands of a capitalist world. In Hong Kong, Time is money thus McDonald’s strategy is consistently fit to the fast food industry. The company has both economic strategy targeting at customer globally and locally.
McDonalds also uses diversification in its global marketing. McDonalds recognizes that different countries have different values, customs, and tastes. Therefore, McDonalds satisfies these diverse global tastes by diversifying the menu according to each country’s unique preferences. This added diversification tactic, allows McDonalds to stay competitive in a global market. Examples of McDonalds globally diversified menu would be that McDonalds offers an exclusive beefless menu to its customers who live in India. This is because eating beef in India is sacrilegious. To meet the tastes of customers in India, McDonalds created new offerings such as the “Pizza McPuff” and the “McVeggie.” McDonalds considers the cultural tastes in every country it opens its doors
Urbanization is the gradual constant increase in the population of people in urban areas or rather cities. Urbanization is mostly associated with the rural-urban migration phenomenon that takes place when people move in large numbers from rural areas into urban areas in order to seek a better life quality. As much as that can be said it is the only way that the population increases, people may also move from other their own urban areas to other more urbanized areas if they chose to do so. In its initial phase, urbanization was mostly influenced by people wanting better jobs than those they had on the country side, so people moved to more modernized places as agriculture was now being less common and a more technological world was emerging, so they moved to urban area for that reason and mostly better wage salaries. (R.Faridi, 2012; Business Dictionary)
Today, we live in a world that is growing in population faster than ever before. In the rapid of change that has engulfed the developing countries by the beginning of the twenty first centuries, one of the most dramatic and fundamental trend is urbanization. No less striking is the tempo of change the four-fold increase in urban population in these countries in a period of thirty years from 50.4 crores in 1970 to 202 crores by 2000 A.D. The urban growth is several times faster in developing countries. In India urbanization has been as rapid and wide spread as in other developing countries. The effects of this urban explosion are dramatically manifested in teeming slums in the centre of the city and mushrooming shanty habitats at its periphery. In most of the cities one fourth to one half of the population lives in poverty and in intense deprivation of their basic needs. Shocking malnutrition is simultaneously a great contributor to and consequence of the urban poverty syndrome.
In today’s market, McDonalds faces numerous challenges such as fierce competition, a more health conscious customer, and the continual need for improved customer satisfaction and menu. McDonalds needs to go through some changes in order to remain ahead in the fast-food industry.
Much like a smile, the “Golden Arches” can be understood in any language. The McDonalds brand is the most well-known, internationally embraced fast food empire. McDonalds operates over 31,000 franchises throughout the world, with the United States leading the way with a whopping 13,381outlets as of May 2009 [1]. McDonalds has the fast food market cornered, offering an increasing variety of food of beverages, marketed to people of all ages to eat at any time of the day. However, being a corporate giant has its issues. McDonalds has faced a lot of criticism for its high-fat, high-sugar, potentially addictive menu. While the corporation is not likely to outright admit responsible for its actions, McDonalds has seen some changes to address some of the issues. Despite the flaws in the public elements of the brand, McDonalds has established an almost recession-proof economic base [2].
Urbanization is the spreading of cities into less populated agricultural areas. Most people would not think that this is necessarily a problem. They would say that it is good that the “developing countries” were becoming more developed. With urbanization comes factories and more jobs, so the people can make more money and be happier. Right? The problem is that these people must sacrifice their traditional lifestyles, for this new “Urbanism”(the way of life, attitudes, values, and patterns of behavior fostered by urban settings Knox 234). A lot of these people don’t choose this lifestyle- they are forced into it. Because there is a growing demand for natural resources in the core countries, the semi periphery and periphery countries (where many of the resources are) get exploited. The “civilized” world enters the other countries, buys land from the government and then forces the people who are on that land off of it. These people then move to the cities because they have nowhere else to go. Once they get to the city they are lucky to find a job. Sometimes these jobs pay as little as 80 American dollars a year and can barely support a family. As a result many turn to crime or prostitution to make ends meet. Our worst poverty is generally better than the average people in these third world cities.
McDonald’s India overcame all these challenges by focusing on its core values of delivering quality products, served in a friendly environment, in a clean place, at affordable prices, to set up its growing network of outlets. Several factors contributed to
Focusing on local produce – if McDonalds focuses on local produce, it has been shown that consumers favour this and trust produce from New Zealand, which may lead to an increase in profits.
McDonalds uniform menu offerings can be mass produced; therefore helps to lower production costs. Additionally, the company bargaining power with its suppliers lowers its input costs and boost margins and even more importantly, McDonald 's offers a very large advertising budget which gives the company a significant competitive advantage over its competitors. Much of McDonald 's sales occur outside the United States and thus, with McDonald 's tapping extensively into global expansion therefore the company’s international operations will continue to strive and