McDonald's International Marketing Strategy

McDonald's Corporation is the world's largest seller of hamburgers and other fast foods. Although basically an American operation, and one of the best known American symbols, most of its revenues come from operations in foreign countries. In its Annual Report for 2000, the company states that 62 percent of its annual revenues are attributed to operations on foreign soil.

This presents an interesting situation for the company that built its first era of profitability from the act of making all the food the same. The hamburgers were a precise size, the same amount of pickles was put on each bun, and milkshakes were measured with laboratory precision. Usually when an American company franchises outside the United States, there are certain modifications that must be made.

In the case of McDonald's however, the business model is basically the same no matter what country it goes into. What varies from location to location is the food. For example, according to the country locator on the company's web site, where you can find fascinating information about the company's International restaurants, in Argentina, instead of the Big Mac, the most favorite sandwich is the McNiffica, (patty, cheese, tomato) while in Japan, it's a McTeryaki, and in India, McDonald's serves no beef in its burgers, which are made of tofu.

In countries where chicken is too expensive, Veggie McNuggets, (a non-chicken version of the popular C

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egy, according to its 2000 Annual Report, is based on three elements: A) Adding restaurants; B) Maximizing sales and profits at existing restaurants, and, C) improving international profitability in a culturally sensitive way. This implies that a McDonald's opening in a foreign land does more than just change its menus. It adapts its operating manual for the convenience of the local franchisee. Quoting from the Annual Report: Maximizing sales and profits at existing restaurants will be accomplished through better operations, reinvestment, product development and refinement, effective marketing and lower development and operating costs. Improved international profitability will be realized as economies of scale are achieved in individual markets and as the company benefits from the global infrastructure. That global infrastructure is based on an International Franchise Agreement which varies slightly from the domestic version. Both the domestic and international agreements grant to the franchisee the right and authorization to operate a specific McDonald's restaurant, usually for a period of 20 years. These rights include the use of McDonald's trademarks, restaurant decor designs, signage and equipment layout, the formula
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Approximate Word count = 1482
Approximate Pages = 6 (250 words per page)

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