FOREIGN TRADE UNIVERSITY

School of Economics and International Business

Advanced Program of International Business Economics
******************************

INTERNATIONAL BUSINESS
MCDONALD’S INTERNATIONAL BUSINESS STRATEGY
LECTURER: Ths. Nguyễn Hồng Hạnh

GROUP 8
Nguyễn Hải Ngọc 1711140065
Nguyễn Thị Thảo Ngân 1711140063
Võ Lê Minh Xuân 1711140089
Tô Quốc Hoàng 1711140035
Nguyễn Thế Huy 1711140041
Nguyễn Tuấn Hùng 1711140038

Hanoi, 2020
 Contents
I. Introduction............................................................................................................................3

II. Literature Review...............................................................................................................3

III. Overview of McDonald’s....................................................................................................5

1. McDonald’s Background......................................................................................................5

2. SWOT Analysis....................................................................................................................6

IV. McDonald’s International Business Strategy...................................................................8

1. McDonald’s Multidomestic Strategy....................................................................................8

2. The Case in India................................................................................................................10

3. The Case in Singapore........................................................................................................14

V. The Effectiveness of McDonald's International Business Strategy.................................17

1. Customer Satisfaction.........................................................................................................18

2. Enhanced Goodwill............................................................................................................18

3. Lower Production Costs.....................................................................................................19

VI. Conclusion.........................................................................................................................20

VII. Reference...........................................................................................................................21

2
 I. Introduction
Globalization continues to influence world economies, as reduced tariffs, enhanced
communications, and increased capital mobility have allowed companies to connect to global
financial markets and expand their businesses internationally. However, successful expansion
into new foreign markets demands that companies adopt international business strategies that
best fit their needs and capabilities. International business involves dealing with foreign
stakeholders, employees, consumers, and governments, and therefore, business managers need to
consider many factors when conducting business in global markets, such as competition, supply
chain management and pricing strategy. In order to successfully expand their business through
internationalization, companies need to spend the necessary time and resources to understand
global market opportunities and choose the proper international business strategies.
Established in 1940, McDonalds is one of the famous and successful global fast food chains in
the world. The fast food chain has conquered the US and is now focusing on the rest of the
world. McDonalds, along with this trend, continues to strive toward customer satisfaction while
still enhancing its international market position. Since the company's inception, McDonalds have
been using effective management and expansion strategies to enter global markets and to gain a
reputation in the global fast food market.
During their journey, McDonalds has faced lots of challenges for prospering in different regions
as each region introduces new risks and challenges. Therefore, the critical purpose of this
research is to analyze and evaluate the various strategies McDonald applied to enter and establish
itself into new markets. Cases regarding their penetration into India and Singapore will be
discussed to shed light on the business strategies they used to resolve international issues in each
country and its effectiveness.
II. Literature Review
Finding the right congruity among localization and standardization of promoting rehearses is an
essential test for worldwide endeavors (Terpstra and Russow, 2000, p. 9), since when global
endeavors stretch out their business to unfamiliar business sectors, nature of business, culture,
strategy, and society are not equivalent to the domestic market. Thus, new products advancement
ought to consider whether to pick standardization or adaptation as it explicitly impacts marketing
projections and clients decisions (Boztepe, 2007). Kotabe and Helsen, (2008) expressed that
alludes to giving the same products to the neighborhood and unfamiliar business sectors. The
aim is to decrease costs. Localization (customization) infers firms adjust products taking into
account cross-edge so as to satisfy clients' needs and demand in various business sectors.

3
Standardization focuses on minimal effort through huge scope producing, yet ignores customers'
inclinations. At the point when a firm or organization enters another market with varied culture,
it is most recognized that the firm faces the issue of cross-culture. Going up against such issues a
couple of firms remain with comparative highlights or to use a comparative technique known as
standardization. Standardization is a comparative promoting system that is applied in all business
sectors (Samiee and Roth, 1992), or it infers that the homegrown advertising technique is applied
to the worldwide market. Standardization communicated that as the overall market is getting the
chance to be particularly homogeneous in nature, which allows the firm to change
standardization over the whole world, (Cavusgil et al., 1993).
Localization underscore on clients fulfillment through variation of products. At the point when
the organization decides to embrace the highlights of the new condition with credit it is known as
Localization or adaptation strategy. Medina and Duffy (1998) expressed that adaptation is a
significant change required by the need of the engaged market as to make product fitting to
unfamiliar market circumstances. Benett (2008) expressed that transformation procedure is
reasonable in simply those circumstance where there is an enormous differentiation in the
necessities and requirements of the purchasers, fulfillment level is high which qualities
associations to isolate their thing from the others to fulfill fundamental essentials of host nation
and where the client's training level, salary level, client way of life is high. Cavusgil et.al (1993)
communicated that association's uses transformation technique so as to accomplish upper hand.
With the strategy of globalization, picking a standardization or localization is a state of thought.
Ozsomer and Simonin, (2004); Czinkota et al., (2004) expressed that a couple of scholastics
expressed that worldwide endeavors ought to normalize their product and services, since they
accept that with the headway of correspondence and overhauling innovation, the world business
sectors will be homogenized. Moreover, societies can be joined and a few authors guarantee that
the demand and choice of consumers over the world are turning out to be similar  (Kotler et al.,
2008). Zou and Cavusgil, (2002) expressed that similar demand, technologies, and low exchange
hindrances permit the universal firms to offer similar products and services in different business
markets.
Anyway some global endeavors have restricted their product according to the need and demand
of the foreign markets. Most specialists accept that product localization is fundamental for
overall extension. Keegan and Green (2008, p. 21) recommend that products should be adjusted
in like manner to different market circumstances. In addition, Gupta and Govindarajan (2004, p.
56) expressed that it is significant for companies to adjust products to manage the nearby market

4
since companies can receive rewards in three significant zones: piece of the overall industry,
cost, and serious position. On the off chance that an organization uses variation procedures, it
can fulfill clients' needs and demands (Kotabe and Helsen, 2008). Social distinction is another
explanation that powers worldwide dares to receive localization techniques to prevail in the
unfamiliar market as well. Johnson and Arunthanes (1995) expressed that social distinction
positively affects product transformation, more so on consumer product than industrial product.
Fast food ventures need to think about finished while going into new areas all the business
functions, products and all promoting components, for example, product design, name,
positioning, packaging, price, advertising mode, distribution, and customer service, to penetrate
the ideal new business sectors and choose the ideal system and technique for execution to take
after, without overlooking in the meantime the important brand character, product focus or new
product, and the all-time needed word of mouth and perception  among consumers. 
Many researchers believe that to prevail in the unfamiliar market the worldwide endeavors
should combine both standardization and localization systems. At the end of the day they should
think worldwide yet act locally (Kotler et al., 2008). It means the operation should be
standardized but the elements of marketing mix should be as per the need of the local customers.
III. Overview of McDonald’s
1. McDonald’s Background
McDonald's Corporation is an American fast food company, founded in 1940 as a restaurant
operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They
rechristened their business as a hamburger stand, and later turned the company into a franchise,
with the Golden Arches logo. McDonald's is the world's largest restaurant chain by revenue,
serving over 69 million customers daily in over 100 countries across 37,855 outlets as of 2018.
Although McDonald's is best known for its hamburgers, cheeseburgers and french fries, they
feature chicken products, breakfast items, soft drinks, milkshakes, wraps, and desserts. In
response to changing consumer tastes and a negative backlash because of the unhealthiness of
their food, the company has added to its menu salads, fish, smoothies, and fruit. The McDonald's
Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as
sales in company-operated restaurants.
As the biggest fast food restaurant chain in the world, the company considers its corporate vision
and mission statements as essential policy and strategic management tools to ensure continuous
growth. McDonald’s corporate mission is “to be our customers’ favorite place and way to eat and
drink.” This mission statement highlights the significance of customers as the business focus,

5
while maintaining the company as a major influence on their food and beverage purchase
decisions. As a fast food service business, the company develops restaurant designs and layouts
to optimize productivity and customer experience. This point presents challenges to the business
in terms of effectively influencing people’s behavior. McDonald’s marketing mix or 4P helps in
reaching this corporate mission, especially by promoting the company, its brand, and its
products, to influence consumers. McDonald’s corporate vision is “to move with velocity to
drive profitable growth and become an even better McDonald’s serving more customers
delicious food each day around the world.” This statement is included in the growth plan that the
company introduced in 2017. The company’s previous vision statement was “Our overall vision
is for McDonald’s to become a modern, progressive burger company delivering a contemporary
customer experience.” In following this corporate vision statement, the company expects growth
and an overall enhancement of the various areas of the fast food restaurant chain business.
2. SWOT Analysis
a. Strengths
Strong brand name, image and credibility: McDonalds has built tremendous brand equity. With
more than 31,000 restaurants selling burgers and fries in nearly 120 countries, it is the number 1
fast food company by revenue. This brand enjoys the privilege of being the only fast food brand
in top ten of the most powerful brand names in the world.
McDonald's Plan to Win: McDonalds' customer-focused Win Strategy establishes a systematic
framework for its global business, but enables local adaptation. McDonalds has strengthened the
restaurant experience for consumers worldwide and increased comparable revenue and customer
visits in each of the last eight years through the implementation of initiatives surrounding the
five elements of its Plan to Win-People , Goods, Location, Price and Promotion. In conjunction
with financial discipline, this strategy has achieved good results for the company's
Technology initiatives: McDonald’s remains a pioneer of technology around the globe.
Initiatives like implementing self-service with kiosks, mobile order and payment systems are
benefiting McDonald’s image as the ‘restaurant of the future.’
Good marketing strategies: People at all ages know that Ronald McDonald 's face is synonymous
with the Colossus restaurant chain, regardless of the continent. This results in wonderful
management marketing campaigns that perform a very detailed business research, resulting in a
lot of success around the world.

6
 b. Weaknesses
Problem related to health issue: McDonalds use Trans—fat and beef oil in their food. It is not
illegal but it may leave a bad effect on the wellbeing of the client since Trans-fat is the cause of
some cancer.
The Franchise business model: McDonald’s is the best example of international franchising
models. However, having this complicated web of franchised and company-operated restaurants
expose the brand to certain risks: financial deterioration, mismanagement, customer
dissatisfaction, and low revenue generation. The company heavily depends on the franchises
which work independently and hence they have no control over their day to day performance, but
it affects the brand directly.
Legal action: In the midst of a variety of litigation and other court proceedings, McDonald's has
been involved in several cases surrounding the issue of trademarks, customer services.
c. Opportunities
Globalization, expansion in other countries: In almost 120 countries, McDonalds has more than
31,000 restaurants serving. At least 14,000 of the 31,000 restaurants are in the U.S. Now, since
McDonalds' commitment to favors and cultures of each country it enters, McDonalds will open
more restaurants in new areas such as China or India, the nations whose cultures profoundly
influence people's lifestyle.
Growth of the fast food industry: The fast food industry is significantly evolving. The change in
lifestyle leads to a change in the eating habits of individuals. In the past, if fast food was
preferred only by staff, drivers or someone who didn't have enough time for a home meal;
nowadays, almost everyone eats fast food and a lot of them really like it.
Low-cost meals: With a low-cost menu, McDonalds is able to target low-income clients. This
segment constitutes a fairly remarkable portion, particularly in recent times, when the global
economy is struggling. For McDonalds, it is not difficult to extend low-cost menus to all
restaurants.
Diverse tastes and needs of customers: The tastes of clients are now becoming more varied.
Consequently, in order to satisfy them, they need new service formats. McDonalds, with
innovative market formats like McCafe, will draw new consumer groups, such as civil service,
who enjoy coffee and want to use Wi-Fi to function while drinking coffee..
Innovative products: Although people concern about how McDonalds influence badly on their
health, it is also a chance for McDonalds. This company can develop new products, specifically
fresh burgers or healthy desserts.

7
 d. Threats
Intensity competitors: Along with the development of the fast food industry, there are many new
fast food brands entering the market. It is nothing to say if there is no strong brand which can
compete with McDonalds. However, in fact, there are some and they are becoming stronger
gradually, for example Yum!Brands, Wendy’s or Burger King. Although market share of these
brands are lower than McDonalds, they try to gain more customers from McDonalds. Moreover,
more casual dining restaurants increase their burger offering and decrease the price. If we are not
really in a hurry, we may choose this kind of restaurant instead of fast food restaurants. They
also become the competitors of McDonalds.
Public health crisis: With a growing number of obesity cases among Americans, fast food chains
like McDonalds will continue to be overshadowed by their previous products offerings, for
example Supersized Meal, no fruit or yogurt, slim salad selection. Besides, people nowadays are
facing heart problems more seriously. As a result, they require nutritious and healthy food as
well as lifestyle.
IV. McDonald’s International Business Strategy
In this modern society, consumers are tending to move towards a healthier lifestyle associated
with organic food in daily meals. Hence, food industry needs to respond quickly to the changes
by offering healthy dishes. Apart from unhealthiness of their main menu, McDonald’s has served
fruits, salad and smoothies to meet customers’ demand. Like other corporations, McDonald’s
came up against many challenging times as well. However, with its business strategy throughout
operation, the company makes it one of the most successful fast food franchises in the world.
1. McDonald’s Multidomestic Strategy
McDonald employs a multidomestic strategy in terms of emphasizing responsiveness to local
requirements within each of its markets. A multidomestic strategy is an international marketing
approach that chooses to focus advertising and commercial efforts on the needs of a local market
rather than taking a more universal or global approach. This means that companies employing
this marketing strategy will seek to understand the culture of various local markets and tailor
their entry into those markets based on the demographics of that area.
The process of globalization has made several international businesses modify their strategy to
adapt according to cultural differences. The cross-cultural knowledge allows businesses to
operate successfully in the international environment. It is important for businesses to adapt
according to customers' taste, preferences, and the law. In the international business
environment, besides adopting standardized approaches such as brand name or packaging,

8
McDonald's has been following up the differences in culture, religion and law to meet
customers’ requirements.
McDonald's has differentiated its products on the basis of differences in cultures. This reflects
that culture is one of the most important elements of the internationalization strategy of
McDonald's. For instance, in Australia, a majority of products include chicken as the main
ingredient. On the other side, in the United States, beef is the main ingredient. Therefore,
McDonald’s has also adapted its menu according to the specific needs of a culture. In the South
African market, McDonald's was required to offer additional products on its menu. Beside the
traditional cheeseburger and Big Mac, McDonald's also offered the Double Hamburger. This
product contained an extra layer of beef to cater to the needs of customers in the South African
market. The burgers offered by McDonald’s also differ in Japan where customers can order a
Korokke Burger. This burger consists of mashed potato, katsu sauce, and cabbage. Similarly, in
Malaysia, the brand offers a Double Beef Prosperity Burger. In Italy, the burgers are offered with
a ciabatta roll. In addition to the menu, the other adaptations that have been made by McDonald's
in different cultures include changes in the web layout. In England, the layout of the webpage
has a British theme.
What's more, multidomestic strategy not only alerts the menu of McDonald’s, but changes
marketing strategies as well. One of the core elements of the marketing strategy of McDonald's
involves sponsoring local and international sports events. This strategy has allowed the brand to
achieve success in the international market. The marketing strategies of McDonald’s differ on
the basis of culture and country. In France, the advertising of McDonald’s focuses on French
cultural values. In East Asia, McDonald's has targeted the younger generation that is the core
market of the brand. To target this market, McDonald's has invested in the television
advertisement that targets children. However, in China, McDonald's did not choose television
advertisement because of the little impact of this medium. In this market, McDonald’s has
invested in newspaper and magazines advertisements.
There are various factors of the multidomestic strategy of McDonald’s that have resulted in the
success of the brand. The first element involves the difference between the brand and the
products. McDonald's didn't confuse its brand with products. The brand name of McDonald’s is
strongly associated with hamburgers. However, it has planned to open vegetarian restaurants in
India because of the preference of Indian customers for vegetable burgers. Another important
part of the internationalization strategy of McDonald’s involves identifying products that have
international appeal . Some of the products of McDonald’s including fries and shakes have

9
international appeal. Therefore, McDonald’s has included these products in the menu of every
country.
McDonald’s believes that the entry to a new market offers an opportunity to add new brand
attributes. In the United States, McDonald’s is a well-known brand because of its affordability.
However, in other countries where the middle class is growing, it is considered to be a status
symbol. Therefore, McDonald's entered into both large and emerging markets, instead of
focusing on only developed nations. The internationalization strategy of McDonald’s has
allowed it to achieve success in China, India, the United Kingdom, the United States, as well as
other markets.
Moreover, there is no doubt that hiring local employees plays a crucial role in the success of
McDonald’s in the international markets. The major problem faced by McDonald’s in the
international market was the use of the standardized operating model. When McDonald's first
enters a new country, it first imports its suppliers, mostly from the United States. With an
increase in market knowledge and experience from the local, McDonald's tries to find the source
in the nearby areas. Therefore, significant investment has been made in the growth and
development of employees. McDonald's believes that its success depends on the commitment to
deliver higher value to the customers.
The ‘Think Global, Act Local’ perspective of the company is the key success factor. The
formation of joint ventures with local partners has also allowed McDonald’s to deal with
challenges present in the local environment. The theory of internationalization that is applicable
to the case of McDonald's is cultural distance. The cultural-distance theory has highlighted the
need for considering local culture when expanding into a new market. According to this theory,
it is important for businesses to identify differences in their host culture as well as a new culture.
The identification of cultural differences helps in the development of culturally appropriate
strategies. The cultural-distance theory has also highlighted the need for forming joint ventures
in the global market.
2. The Case in India
McDonald’s entered India in the year 1996 when the fast food retail market in India was at a
nascent stage. Encountered with several challenges in the beginning in terms of adapting to the
tastes, preferences and culture of the local customers, changing the perception of Indian
consumers towards American food habits, obstruction from political parties, issues with
distribution, designing a proper supply chain to training the employees on McDonald’s
standards, the fast food giant emerged to be the market leader by 2011. The success of

10
McDonald's in India is due to the company's proper entry strategy, the next part of the article will
focus on analyzing the multidomestic strategy of McDonald’s in India on the aspects of Product,
Price, Promotion, Place and People.
a. The India Market
India is a vast subcontinent with an area one-quarter of that of the United States, and a
population almost four times that of the US, at about 950 million. The per capita GDP is quite
low, at US$390 in 1999. However, after adjusting for purchasing power parity, India was ranked
the fifth-largest economy in the world (ranking above France, Italy, the UK and Russia) with the
third largest GDP in Asia in 1999. Among emerging economies, India is often considered second
only to China.
The diverse Indian consumption patterns are slowly converging with the impact of globalization.
Today India has the youngest population profile very significant when compared with other
world countries. It is the young people who are influencing their parents spending or spending
their own money. Entertainment, clothing and restaurant dining are categories that are witnessing
maximum rise in consumer spending. From being a nation of savers now the country is altering
itself into a nation of spenders. With increase in disposable income there is an active shift
towards consumerism. The habit of more eating out has set in and women are changing and re
organizing their house hold chores. Ready to eat food and family food service restaurants are
becoming popular.
India being a very ancient country with a strong culture and customs, McDonald’s had to
consider the cultural, economic and socio political factors in India. The country has six major
religions namely Hinduism, Buddhism, Sikhism, Islam, Jainism and Christianity with diverse
beliefs and value systems. Religious beliefs, customs and value system plays a significant role in
the customer’s preference for food and dining. The company’s menu customization for India had
to be very clear that products offered in India will not contain beef and pork.
b. McDonald’s Multidomestic Strategy
Product
Although McDonald’s had done product adaptation to suit local tastes and cultures in several
previous ventures, such as the Teriyaki Burger in Japan, rice dishes in Indonesia, noodles in
Manila and McLox Salmon sandwiches in Norway, the degree of adaptation required in India
was significantly greater. McDonald’s replaced its core product, the Big Mac, with the Maharaja
Mac. The latter had a mutton patty (instead of the beef patty in the Big Mac), to avoid offending

11
the sensibilities of Hindus (80 per cent of the population), who consider killing cows as
sacrilegious, and Muslims (12 per cent of the population), for whom pork is taboo.
In addition, since 40 percent of the market is estimated to be vegetarian, the menu included the
McAloo Burger (based on potato), a special salad sandwich for vegetarians, and the McChicken
kebab sandwich. It also offered spicier sauces, such as McMasala and McImli (made from
tamarind). McDonald’s commitment to the Indian customer is evident from the fact that the
company uses local spices and chilies to develop special sauces and mayonnaise which are
particularly eggless. The cheese too is vegetarian and the company decided to give equal
weightage to vegetarian and non-vegetarian products in the menu. Non hydrogenated cooking oil
was used as a medium for cooking.
Other elements of the menu, such as chicken nuggets, fillet fish sandwiches, fries, sodas and
milkshakes, were in common with the rest of the McDonald’s system. It was in 2001 the
company came out with a unique product for India which has the highest sales among all
McDonald’s products the Aloo tikki burger.It was the effort of the Indian Research and
Development Team which put the aloo tikki a traditional Indian food into abun and created a
trade mark product for McDonald’s the McAloo Tikki. Crafted specially for India, McAloo
Tikki continues to woo Indian hearts. The company describes the product as a combination of a
potato and peas patty with special Indian spices coated with breadcrumbs, served with sweet
tomato mayo, fresh onions, tomatoes in a regular bun.This McAloo Tikki outsells every other
McDonald’s product in India. The success of the McAloo Tikki in India motivated McDonald’s
to introduce the product in the Middle East and in Singapore.
Price
One of the reasons for McDonald’s success is due to its clear understanding of the Indian
economy. Customers prefer products that are more talked about and they also have their own
perception of what a product is worth. In India McDonalds classified products based on two
pricing strategies. One is the Branded Affordability (BA) and the other is the Branded Core
Value products (BCV). The BCV products consist of the high priced products like the McVeggie
and McChicken burgers that cost Rs 50 to 60 and the BA products include McAloo tikki and
Chicken McGrill burgers which cost Rs20 to 30. These strategies were followed to satisfy
consumers with different price perceptions. BA was launched in 2004 and the objectives were to
target college going students and families, to become the favoured lunch option for on the move
executives and to improve sales during the sluggish parts of the day. For BA the company
launched four burger products at Rs.20 and one soft serve for Rs.25. From 2011 the Happy meal

12
was priced starting at Rs.69. The McAloo Tikki was reduced from Rs.25 to Rs.20 and the sales
increased by 35%. The chicken Mc.Grill was reduced from Rs.28 to Rs.20 and the sales
increased by 22%.
Place
In terms of the selection of cities, McDonald’s followed the same strategy in India as in the rest
of the world. Its initial focus on Mumbai and Delhi was driven by the following factors: they
were the two largest cities in India; their citizens enjoyed relatively high income levels compared
to the rest of the country; and they were exposed to foreign food and culture. After establishing a
presence in the leading cities, McDonald’s then moved to smaller satellite towns near the
metropolitan cities (for example, from Delhi to Gurgaon and Noida, both suburbs of Delhi, and
from Mumbai to Pune). McDonald’s often found that there were positive spillover effects, in
terms of its reputation, from the metropolitan cities to the satellite towns. In Jaipur, the company
was hoping to attract foreign tourists.
Keeping pace with the consumers changing needs McDonald's also functions on models that
drive convenience and create unique differentiation like McDelivery, Drive thru, Breakfast
Menu, high ways and extended hours services.
Promotion
India is a land where family plays an important role. Rather than on individualism in India the
main focus is on collectivism, so In India McDonald’s positioned itself as a family restaurant.
McDonald also emphasized on attracting children. A Happy Meal film was consistently shown
on the Cartoon Network and the Zee (a local channel) Disney Hour. McDonald’s also teamed up
with Delhi Traffic Police and the Delhi Fire Service to highlight safety issues, again trying to
create goodwill among schoolchildren. In October 1999, in conjunction with The Walt Disney
Company and UNESCO, McDonald’s launched a search for Millennium Dreamers. The program
would bring together 2,000 young people from around the globe who had made a positive and
significant impact on their communities. Based on the number of its outlets, India was allocated
two representatives.
By June 2000, the company had started rolling out its first national campaign, as it was
expanding beyond Mumbai and New Delhi. The campaign, budgeted at Rs 100 million, was
expected to highlight (in phased order) the brand (the experience that there is something special
about McDonald’s), food quality and variety. The company also ran special promotions during
festivals, and ‘vegetarian’ days, and was even developing garlic free sauces to bring in ‘hard-
core’ vegetarian traffic

13
People
The kitchen crew had different uniforms to distinguish their role and did not work at the
vegetarian and non vegetarian stations on the same day ensuring clear separation.
3. The Case in Singapore
McDonald’s opened its first restaurant in Singapore in October 1979 at Liat Towers. In that
event, the world’s highest volume of hamburgers was served. Since the successful entry,
McDonald’s has been improving its product and service over the years. Today, McDonald’s is
well-known in Singapore with its large base of 136 local outlets serving 1.2 million customers
each week, and McDelivery, its own home-delivery mobile app. And around 9,000 employees
keep Singapore’s favourite restaurant running ship-shape. The reason for the popularity of
McDonald’s among Singaporeans, despite the fast movement and development of the country
over the years, is because McDonald’s has taken great care in its multidomestic strategy –
making it a uniquely Singaporean experience regardless of its American origin. By implementing
the localization strategy right, McDonald’s has become a big part of Singaporeans’ lives, and is
more than just another place to get food. McDonald’s has successfully embedded itself into the
lives of Singaporeans As a brand, McDonald’s has succeeded in not only making its way to the
Singaporeans stomachs, but to their hearts as well.
a. Food Market in Singapore
If you are new to Asia, and you want to start a F&B business, Singapore is a perfect first market.
Since the country has various cultures, people are willing to try new tastes and flavours. Food is
a national obsession and people can be queuing up for something special. And if it sells well in
Singapore, it is likely that you will succeed in other Asian countries.
However, Singapore’s food industry is diverse with various types of business such as restaurants,
fast food, food court or café shop so there are many substitutes in this industry. Particularly in
the fast food market, there are a wide variety of products that people can choose Burgers King,
KFC, Subways or Starbuck.
Singapore is also an extremely challenging market because consumers are well-travelled, better-
educated, and are highly sophisticated in their dining preferences.They are willing to pay a
higher price as long as they are provided with integrated services, nutritious and higher quality
organic products, and convenience at their fingertips.

14
 b. McDonald’s Multidomestic Strategy
Product
Unique Singaporean Menu
New menu items such as Kiasu Burger — McDonald's first fully Singaporean burger, Kampung
Burger — a chicken burger with a pineapple ring and tangy salsa — takes Singapore by storm.
Chicken McNuggets get dressed in curry sauce — a dip that can be found only at McDonald’s in
Singapore. Chicken McCrispy launches in Singapore — its first foray in bone-in chicken with a
flash-fried and steam-marinate cooking method. Occasionally McDonald’s comes up with brand
new ways to test Singaporeans’ pedas tolerance by introducing the Fiery Mala Burger instead of
McSpicy. Also, Every Lunar New Year, McDonald’s oh-so-saucy Prosperity Burger makes a
reappearance, leaving Singaporeans wishing that it isn’t just a time-limited offering. (Chan,
2016)
To attract younger diners' preference, Create Your Taste (CYT) enables consumers to tailor and
personalize their own burgers, while ensuring that they are tasting the premium. This new dining
experience is different from other Quick-service restaurants.
Learning Singaporean consumers’ desire and needs for healthier meals, McDonald's introduced
nutritional information on its menus so that customers can pick their favorite meals while still
not exceeding their calorie required level. McDonald’s also uses Canola Blend Oil with lower
saturated fats transfat-free, and offers more than 20 menu sets that are 500 calories or under.
Limited Edition Plush Toys
We have seen the long overnight queues for fashion brands releasing limited edition clothes, for
Apply to release the new Iphone,but the crazy queues for McDonald’s toys – more specifically,
their Hello Kitty plushies were something different.
McDonalds has introduced many limited edition collections over the years, but the most
memorable collection which is also the first one is the Hello Kitty McSweet Millennium Love
Collection released in 2000, which was one of the most prolific moments in Singapore queuing
history as around 2.8 million toys were sold within 40 days, said the National Library Board’s
(NLB) web encyclopedia.
Price
One of the most difficult jobs that F&B marketers have to do is to maintain a constant rate of
daily traffic on an ongoing basis. It is challenging because people really don't want to eat the
same thing every day. In order to encourage consumers to patronize their stores, McDonald's
would entice buyers with a range of inexpensive offers. For example, being able to buy a

15
McChicken burger for $2 and a small fries for $1. This pricing strategy of McDonald’s is proven
and thus practised in Mcdonald’s outlets all over the world. The idea is simple; attract price-
sensitive customers to spend at their outlets, rather than to lose them to other F&B rivals.
Place
In 2003, the outlet introduced the first McDonald’s Skate-Thru service in Singapore's East Coast
Park. This innovative concept is also the first in the history of McDonald’s worldwide. The East
Coast Park is home to athletic-minded Singaporeans who are fast, fun, and on the go. Separating
skaters from people on foot is usually a smart move, and catering to the "locals" is always a plus.
There are so many people enjoying the park - and many drop by McDonald's for a bite to eat.
During this visit it was extremely crowded. In 2005, McDonald's turned 24/7, introducing
restaurants that open round the clock to meet the needs of night owls. In 2019, McDonald’s
launched the new McDonald’s App celebrating its 40th anniversary in Singapore to connect with
customers, by offering personalised deals. The App also incorporates functions like McDelivery,
My Feedback, Restaurant Locator and nutritional information. McDonald's also partnered with
food delivery aggregator GrabFood to fulfil demand for additional delivery orders when its
McDelivery riders were fully occupied in Singapore.
Promotion
McDonald’s morning alarm
To further remind customers to visit them regularly, McDonald’s offers its customers the chance
to earn free drinks, food or special deals through its McDonald's morning alarm app. Each day,
one such deal would be given to customers through their smartphone app. To increase the
frequency of customers’ visits, McDonald’s gives out free drinks, burgers or some special deals
through its McDonald’s morning alarm app. Every day, customers would receive a coupon or a
deal, below are some common offers:
#1 Free Hash brown
It’s free; however, a hash brown by itself is not enough for most people as breakfast. By
attracting customers to the outlet to get the free hash brown, McDonald’s may increase their
sales since one may just get a cup of coffee at the same time. Even more, why not get a $3 “Grab
& Go” morning deal that would include a burger as well. So that means on the average a person
would spend $3 for a burger, a coffee and a hash brown. That seems to be a reasonable breakfast
deal to get in Singapore. This is a win-win situation. For McDonald’s, this is a win as well as a
customer who may have spent his money elsewhere would now have spent $3 on breakfast with
them. Customers are happy as well, since they received a free hash brown.

16
#2 1-For-1 Medium Fries
Not many people go into McDonald’s with the intention of just buying a medium fries at a price
of $3.10 per pack, it’s not the most value-for-money deal you could find. However, now
McDonald’s was able to create a sale that they would typically never get by giving a 1-For-1
deal, and getting people to buy the fries. Customers also receive a surplus value since the
customer receives double the quantity of food than they would normally get.
Campaigns to strengthen the bonds with the Singaporean community
McDonald's has made great efforts of running many campaigns to create an even closer
relationship with the Singaporean community – making them less like just another fast food
franchise, but more of a business doing its bit for the nation that welcomed them. For example
the annual Olympic Day Run since 2003, is a joint effort by McDonald’s and the Singapore
National Olympic Council (SNOC) to spread the Olympic values of excellence, friendship and
respect, and to encourage people to get active.
People
McDonald's recruits mature workers and housewives to cover the shifts of younger crew during
school examination periods. In order to ensure that 'uncles and individuals' are well incorporated
into the system, McDonald's updates the HR policies and working environment to enhance
transparency and visual use, deliver training programs along with training aids both in English
and Chinese. McDonald’s hires workers from all backgrounds and ages, providing them
thorough trainings and career opportunities. McDonald's also helps Singaporeans remain
employed in the face of unwavering disruption by introducing a number of operational and
training improvements to help experienced employees keep up with the latest technology that
McDonald's is engaging in to make operations more effective. In 2017, McDonald's introduced a
new position of Guest Experience Leader (GEL) whose task is taking special care of customers,
especially families with kids. A GEL’s job is to make everyone feel the warm welcome like
home the first second they enter McDonald’s.
V. The Effectiveness of McDonald's International Business Strategy
McDonald’s multi-domestic strategy proves to be effective to a large extent. The positive
impacts it has on the brand can be classified into three categories – customer satisfaction,
enhanced goodwill and lower production cost.
1. Customer Satisfaction
It is very crucial to know and understand the religion and the culture of local consumers. For
example, most Indians are Hindus, Muslims and vegetarians, in order to avoid hurting religious

17
sensibilities of Indian consumers; McDonald’s introduced the mutton-based burger and
vegetarian burgers. The high degree of adaptation to the local taste instead of offering pork and
beef leads to higher acceptance rate among the local consumers. This is just one example of
many of McDonald’s menu customizations to suit the local culture and food preferences. The
effort to do so is vital to the success of the business worldwide.
The affordable prices and value-ladder strategy are used to ensure affordability, increasing their
customer base. People in many of McDonald’s markets are very price sensitive (e.g.: India)
therefore in order to attract customers or persuade them to come back, McDonald’s needs to
adjust their pricing accordingly. . The lower price does not hurt McDonald’s overall performance
as it can be compensated by a greater volume of sales. McDonald’s uses the family-centric and
child-centric strategies to increase customer satisfaction. McDonald’s concentrates on the
children as their main consumers . Introducing activities such as a children's parade help to
attract both children and their parents. These adaptations to the local cultures help to generate
customer satisfactions. The high level of customer satisfaction will enhance brand loyalty
therefore the threat of new competition and rivalry will be substantially lower.
To all the customers of all countries, staff are encouraged to be friendly and provide services
with a smile. McDonald’s effort to satisfy the customers can also be seen through their creating a
clean environment: crisp white button shirts, black slacks, paper hats or clean bathrooms. No
matter the countries or the religions, maintaining the same standards and manners enables
McDonald’s to make good impressions on customers or in other words, boost customer
satisfaction.
2. Enhanced Goodwill
McDonald’s understands that it is very important to build good relationships with the local
citizens and the local states , thereby lifting brand awareness and reputation , generating positive
political support (e.g: for expansion strategy). Therefore, McDonald’s launches corporate social
responsibility (CSR) activities by sponsoring events. For instance, they sponsored the Blue Dot
(supports educational programs for the girl-child) which generated a lot of goodwill. This also
draws attention and recognition from the politicians, the government and communities, which
would support McDonald’s in their future operations.
McDonald’s adopts the joint-venture strategy to stress on local management which is welcome
by the government as this will assist in their local economies. Besides, the employment of local
people generates quality and long-term employment opportunities for the locals. This is very

18
meaningful as it not only helps to improve the local employment, the people ‘s financial situation
but also gain McDonald’s support and recognition from the officials.
Another worth praising approach of McDonald’s branches worldwide is their commitments to
protect the environment. The company’s credo is “ Our responsibility is our opportunity”. For
instance, McDonald’s Canada announces the country's first “ Green Concept restaurant” as part
of its sustainability journey. They introduce fully re-pulpable cup for cold beverages, New fibre
lids, Wooden cutlery, Paper straws. Such effort from the business gains them huge public
recognition and support, which will be beneficial in the future.
3. Lower Production Costs
One of the primary disadvantages of multi-domestic marketing is that it can be expensive to
execute. It takes time and money to research new markets and gain insight into the local needs
and wants of those consumers; and once those have been figured out, it takes money to
implement the strategies. However McDonald’s comes up with a solution to this issue through
its efficient supply chain management and make use of local resources. To cut the costs,
McDonald’s makes use of the raw materials from local suppliers. McDonald’s transferred its
technology to the local market to meet the various regulations. They work closely with the
suppliers to ensure the greater yield of agricultural products, ensuring quality and timely
deliveries. McDonald’s worldwide also makes investments to set up a reliable network of
strategic local distribution channels which helps to lower production costs, delivery cost and in
the long term, creates a competitive advantage for McDonald’s. For example, in India,
McDonald’s have two distribution centers in Delhi and Mumbai, to reduce the opportunity and
transaction costs, they will only open up new outlets within a 500-km radius of its main
distribution centers which lead to lower cost.
By using the multidomestic strategy along with other methods, McDonald's has the largest
market share in the fast food industry (10% Global Share and 43% of the U.S. Fast Serve
Market). The fast food market size is $245 billion worldwide. McDonald's has a market share of
10% of the world wide fast food market. McDonald's in the United States has $8.253 billion of
the Fast Food Market.
In 2015 a study was also done on all restaurant chains in the US. It indicated that McDonald's
had $35.8 Billion in sales in the US in 2014, compared to $12.7 Billion by Starbucks, $11.9
Billion by Subway, $8.6 Billion by Burger King and $8.5 Billion by Wendy's. Of the Quick
Service Food Industry in the United States, it is noted that McDonald's represents 43%.

19
In 2016, McDonald's was the highest ranked restaurant brand with the value of $42.937 billion
US dollars.
VI. Conclusion
The report has been exploring the key features of McDonald’s multi-domestic strategy and how
the strategy has been the key attribute to McDonald’s ‘s global success. They customize their
menus to suit the local culture and local food preferences, adjust pricing to fit with the degree of
price sensitivity of local consumers or make use of the local resources. The multi-domestic
strategy is the key to the global success of McDonald's, making it the brand with largest global
market share in the fast food industry, earning billions of dollars of profit worldwide every year.
However, McDonald’s is facing different challenges to maintain its position in the global market.
For example, business is reported to be left behind by shifts in dining habits in the home market,
US. Upstart rivals have been able to capitalise on consumer demand for food that is perceived as
healthier and made with fresher, natural ingredients while McDonald’s has trouble with adapting.
In China, under the circumstances that food safety comes near the top of any league table of
public concerns, McDonald’s was hit hard when an undercover television investigation accused
the company last July of using a mainland supplier that relabelled expired meat. McDonald’s
said earlier this month that same store sales in the Asia-Pacific, Middle East and Africa region
continued to suffer the effects of the scandal, dropping 4.8 per cent in the fourth quarter, year on
year.
These are two of many examples of the challenges McDonald’s has to face worldwide. If
McDonald’s fails to introduce timely solutions to the problems, they will be under threat of
losing market share to its competitors. Constantly changing and adapting to the situation would
help McDonald’s to maintain its position in the global market.

20
 VII. Reference
All Answers Ltd. (November 2018). International Management of McDonald's. Retrieved from
https://businessteacher.org/reports/international-management-of-mcdonalds.php?vref=1
Bennet.R. (2008). International Business (2nd edn). New Delhi, India, Pearson education Ltd.
Boztepe, S. (2007). Toward a framework of product development for global markets: a user-
value-based approach,Design Studies, 28, pp. 513-533.
brandNEWSROOM. (2019). 40 years of lovin' it. Retrieved from
https://brandnewsroom.straitstimes.com/mcdonalds-40-years/
Cameron, C. (2015). McDonald’s International Marketing Strategy: An Analysis. Retrieved from
https://tiandrayvette.weebly.com/uploads/2/5/8/6/25862177/mcd_paper_f3.docx
Cavusgil, S. Tamer, Shaoming Zou, and G. M. Naidu. (1993). Product and Promotion
Adaptation in Export Ventures: An Empirical Investigation. Journal of International Business
Studies 24 (3):479-506.
Chan. (2016). Localisation Is Everything - Here's How McDonald's Has Been Making Us Think
It's Singaporean All These Years. Retrieved from https://vulcanpost.com/600631/localisation-
mcdonalds-singapore-strategy/
Czinkota, M.R. et al. (2004). Mastering Global Markets: Strategies for Today's Trade Globalist,
United States of America: South-Western.
Gupta, A.K. and Govindarajan, V. (2004). Global Strategy and Organization, United States of
America: John Wiley & Sons, Inc.
Gupta, S. (2019). McDonald’s SWOT Analysis(2019). Retrieved from
https://bstrategyhub.com/mcdonalds-swot-analysis/
Johnson, G. and Scholes, K. (2002). Exploring corporate strategy: text and cases, 6th ed.,
Harlow: Financial Times/Prentice Hall.
Keegan, W.L. and Green, M.C. (2008). Global Marketing, 5th ed, The United States of America:
Pearson Prentice Hall.
Kotabe, M. and Helsen, K. (2008). Global Marketing Management, 4th ed., United States of
America: John Wiley & Sons, Inc.
Kotler, P. et al. (2008). Principles of Marketing, 5th ed., England: Pearson Education Limited.
Kroc, R. A. (1997). Grinding it Out: The Making of McDonald’s .
Levitt, T. (1983). “The globalization of markets”, Harvard Business Review.
Mayer, P. (2019). McDonald’s Mission Statement & Vision Statement (An Analysis). Retrieved
from http://panmore.com/mcdonalds-vision-statement-mission-statement-analysis

21
McDonald's. (n.d.). Our History. Retrieved from https://www.mcdonalds.com/us/en-us/about-
us/our-history.html
Medina, J. F. and Duffy, M. (1998). Standardization vs Globalization: A New Perspective of
Brand Strategies‟, Journal of Product and Brand Management, 7:3, 223-243
Nandini, A. S. (2014). McDonald’s Success Story in India. Journal of Contemporary Research in
Management. Retrieved from
https://www.academia.edu/16003302/McDonald_s_Success_Story_in_India
Nitin Pangarkar, S. S. (n.d.). Beefing up the beefless Mac: McDonald’s expansion strategies in
India. National University of Singapore. Retrieved from
https://www.academia.edu/6270511/Beefing_up_the_beefless_Mac_McDonalds_expansion_stra
tegies_in_India_1
Ozsomer, A. and Simonin, B.L. (2004). Marketing program standardization: A cross-country
exploration, International Journal of Research in Marketing, 21(4). pp. 397-419.
Profitworks. (2016). How McDonald's Became The Leader In The Fast Food Industry. Retrieved
from https://profitworks.ca/small-business-sales-and-marketing-resources/blog/marketing-
strategy/541-how-mcdonalds-became-the-leader-fast-food-industry-marketing-strategy.html
Rathi, G. (2013). Global Strategy of McDonald and How It Reached All corners of World.
Samiee, S., & Roth, K. (1992). The influence of Global Marketing Standardization on
Performance. Journal of Marketing, 56 (April). 1-17.
SlideShare. (Jan 10, 2017). Internationalisation Strategies of McDonald. Retrieved from
https://www.slideshare.net/charulsingh/internationalisation-strategies-of-mcdonald
Terpstra, V. and Russow, L. (2000). International Dimensions of Marketing, London: South-
Western College Publishing.
The Singapore Economic Development Board. (2016). How McDonald's keeps winning over
Singaporeans. Retrieved from https://www.edb.gov.sg/en/news-and-
events/insights/innovation/how-mcdonald-s-keeps-winning-over-singaporeans.html
Toughnickel. (2019). McDonald's SWOT Analysis and Recommendations. Retrieved from
https://toughnickel.com/industries/McDonalds-SWOT-analysis-and-recommendations
UKEssays. (November 2018). McDonald's Expansion Strategy. Retrieved from
https://www.ukessays.com/essays/marketing/using-the-multidomestic-strategy-in-india-
marketing-essay.php?vref=1
Zou, S./ Cavusgil , S.T., The GMS: A Broad Conceptualization of Global Marketing strategy and
Its Effect on Firm Performance, Journal of marketing, 66 2002 (October). pp. 40-56
Wikipedia. (2020). McDonald's. Retrieved from https://en.wikipedia.org/wiki/McDonald%27s

22
 CONTRIBUTION STATEMENT

GROUP MEMBERS

# Full Name Student ID Contribution

1 Nguyễn Hải Ngọc 1711140065 The case in Singapore
2 Nguyễn Thị Thảo Ngân 1711140063 Introduction, SWOT analysis
3 Võ Lê Minh Xuân 1711140089 McDonald’s international business strategy analysis
4 Tô Quốc Hoàng 1711140035 The case in India
5 Nguyễn Thế Huy 1711140041 The effectiveness of McDonald’s international
business strategy, Conclusion
6 Nguyễn Tuấn Hùng 1711140038 McDonald’s background, Literature review

23