Company Research
The selected company for this study is McDonald's which has its international presence for fast services and quick delivery of food. The products offered by McDonald are valued for the customers as they are offered at low prices. New products require advertisement in the existing market as it can extend the product line and increase the revenue. Flavoured Tea named Mc tea is introduced in the market in different flavours. Situational analysis is done for analysing the prospects of a new product. The main target is Irish and UK market and all franchises will include Mc Tea. McDonald has already established its brand name and any product launched will have a competitive advantage. Mc Tea will be offered in different flavours which will contain ingredients like strawberry, grape, plum, peach and double apple. The ingredients that will be used in Mc Tea will be procured from suppliers providing the highest quality. To make it even more interesting tea will be served in colourful glasses according to their respective flavours. The price will be analysed according to market conditions and is likely to be as low as one dollar so that customers can easily buy it. Teas will be served hot with instant flavour simultaneously containing some nutrients value with fruits extracts. Further ingredients like rose hips, hibiscus, proteins, liquorice and calcium. It will give intense competition to local tea without artificial flavours (mcdonalds.com, 2020).
McDonald is one of the largest food chains and has successfully established its franchisee across international borders. In 1967 McDonald first international presence was marked by the inauguration of the restaurant at Rico and Canada. Franchisee items included hamburgers, french fries, milkshakes, dessert and breakfast items. The three lagged tool business model has established approximately 35085 restaurants. The global presence is marked by the US as it the largest market segment.
Different entry modes used by McDonald are strategic alliances, licensing, franchising, direct investment and export. McDonald used strategic investment and alliance for its entry mode in a few markets. It established subsidiaries and franchisee for its operation in the international market. Investment route and direct investment were also used as a combination. It has a direct investment for its expansion in the international market (Elia, Larsen & Piscitello, 2019). The franchisee is successful and is observed to run faster. The initial investment done by McDonald is comparatively lower. The revenues earned from the business are in two forms which are rent and service fees (mcdonalds.com, 2020).
The company leverages its competitive advantages in the international market with its well-tailored strategies. One of the most crucial strategies of McDonald's is to think global and act locally. The business has figured out that managing the foreign environment with local support is very difficult therefore they emphasized a lot in developing local value chain with help of the local cultural environment. Companies hire locals in their store because pity has a very good response in attracting customers. The business also adopted a franchise model which helps McDonalds in reducing the cost of setting business and increasing profitability.
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McDonald also engages in environmental friendliness. This is a trending concept and it helps the business in building goodwill to the company. In modern war, several countries are coming up with environmental law with which companies must comply in order to do business there. McDonalds also engages in CSR activities. The company has leveraged its competitive advantage by its pricing strategy McDonalds evaluate the price of their product after hainga deep research on the income distribution, currency exchange rate and local inflation which helps the business a lot. Moreover, the company only opens their shops in metropolitan cities where people can afford their product.
References
Elia, S., Larsen, M. M., & Piscitello, L. (2019). Entry mode deviation: A behavioral approach to internalization theory. Journal of International Business Studies, 50(8), 1359-1371. Retrieved from: https://biopen.bi.no/bi-xmlui/bitstream/handle/11250/2596549/Entry+mode+deviation_JIBS.pdf?sequence=4
mcdonalds.com, (2020), McDonald, Retrieved from: https://www.mcdonalds.com/us/en-us.html
