McDonald’s and its global strategy

McDonald’s is one of world’s leading food service retailers operating and franchising
a total of 38,695 restaurants worldwide in 2019 (Lock, 2020), serving more than 2.5 million
people in over 1,400 locations every day from coast to coast (McDonald's, n.d.). With the
company operating on a global scale, the strategies for its global performances are significant
and attention must be detailed in every aspect of the operation on account of different
legislations, customer consumption and expectations in different countries. This journal aims
to look into McDonald’s global operations and strategies based on its differentiation in
methods of entry, offerings of menus and marketing strategies.

Methods of Entry
Rita Johnson, staff director in international human resources with responsibility for
Central Europe, revealed that when McDonald’s open in a new country, exploratory visits
will be carried out sometimes years in advance of the first restaurant. They will gather
information such as demographics, other food-service competitors and their success to
benchmark its operation and implement a fact-based approach (Solomon, 1996). Each
country displays its own challenges, threats or opportunities. Therefore, before opening,
McDonald’s made sure to comprehend its legislations of the country such as the prohibition
of special promotion and advertised discounts in German (Serwer & Wyatt, 1994). Prior to
joining the country, the company selects its way of entering the market and its structuring
overseas. In Arabic and African markets, McDonald’s uses a developmental licensee model,
in which the restaurants are 100% owned and operated by local business owners (Salama,
2013; Crawford, Humphries & Geddy, 2015). In Europe, the company usually runs wholly
owned subsidiaries considering that these markets resemble the U.S so they maintain the
domestic business model, allowing for some adjustment. “In the U.S. market, these
subsidiaries operate company-owned stores and franchises. In Asian markets, the company
prefers joint ventures, such as the 1,000-plus store operation in Japan in which McDonald's
grabs the standard royalty off the top in these joint ventures, as well as 50% of the bottom
line” (Serwer & Wyatt, 1994). Around 70% of the company's stores over the globe are
franchises and the company gained more than 50% of its profits from its franchise
worldwide. According to Solomon (1996), “McDonald’s total revenue for 1995 was more
than $10 billion, and total sales outside the United States contributed 54% to the firm's
consolidated operating income for the year” and in a report in 2012, 65% of McDonald’s
sales came from international revenues (McDonald’s, Annual Report, 2012.) .

Employment and Training

McDonald’s strived to provide exceptional customer service at every single location

in the world through training models and hiring talents. Robert Wilner, home office director,
international human resources says that "While there may be some specific differences
worldwide in local labor laws or employment practices, our philosophical approach to
employment is the same.” (Solomon, 1996). McDonald’s take employment seriously as they
inquire into the labor laws of each country they are heading to and “ensure that all the local
employment practices, policies and regulations are met”. For example, in Central Europe
countries, employers must provide showers and lockers due to “a lack of shower facilities
where individuals live, an inadequate supply of hot water or simply the high cost of using
standard utilities” and the company has been following the guidelines in many operating
countries like Slovakia, Latvia and Poland (Solomon, 1996). Recruitment-wise, the company
values candidates with the right attitude in its preliminary screening and then selects those
with needed skills. McDonald’s is committed to the recruitment and retention of talents and
encourages growth from within (Solomon, 1996).

Menu and Service

It is inevitable that each country and region have their distinct local flavours, so
McDonald’s tweaked its menu to local taste to attract customers while still keeping the
American taste. For example, instead of selling beef burgers in India McDonald’s sells
chicken burgers instead. Internationally, McDonald’s leans more toward delivering the
American food to the locals than bringing American closer to their local flavours.
McDonald's tweaks its menu to suit regional tastes abroad. That's why there are chicken, not
beef, burgers at McDonald's in India and no pork products sold in franchises in Muslim
countries. But even abroad, McDonald's is still McDonald's, and it reflects a distinctly
American taste. Perhaps that’s why many international McDonald’s items are branded exotic
but feel similar like the cheesy bacon fries from Australia or a Grand McExtreme Bacon
Burger from Spain (Judkis, 2019). Another example is the delivery of French palate when
McDonald’s incorporated locally sourced French cheeses in its menu and opted for a
whole-grain French mustard sauce. By combining global and local, “McDonald’s started
executing a multidomestic strategy and winning the hearts of French consumers” (Fancourt,
Lewis, Majka, 2012). It seems that McDonald’s focuses on a glocalized menu when offering
American fast food with altercations to cater to unique consumer markets (Crawford,
Humphries & Geddy, 2015). Not only does McDonald’s adjust its menus to local taste but
their cultural customs as well. “In Saudi Arabia, McDonald’s restaurants have separate
dining-areas for men and women. And during Easter, Greek McDonald’s restaurants serve
spinach pies, since many people do not eat meat products during this holiday. In Indonesia,
McDonald’s restaurants offer a post sunset meal as a special to Muslims fasting during the
month of Ramadan (Liao, Widowati, Hu, 2011; Crawford, Humphries & Geddy, 2015)

Marketing strategy
One thing that exposes McDonald’s to the world is its marketing efforts. McDonald’s
has teamed up with multiple a number of global brands, most significantly is CocaCola. It
also gains exposure through sponsorships of many large scale events like the Olympics and
World Cup, which allows the company to present itself to around 2 millions viewers. This
collaboration and sponsorship was proven lucrative when figure skater Janett Lynn stated that
she missed McDonald’s and a significant amount of burgers was delivered to France for both
the athletes and the ABC announcer, which prompted a lot of talk and cemented the
McDonald’s brand as Americana in France (Lefton, 2005; Crawford, Humphries & Geddy,
2015).
Suggested Global Strategy
In the group project, we identified the problem statement to be “the low customer
satisfaction because of bad customer service and experience they have in almost every
McDonald’s restaurant”. Global strategy is the approach that can guarantee a company’s
position and growth on an international scale. For McDonald’s to maintain its stand at the top
of the fast food industry in the global market, the company needs to focus more on the
recruitment and training of employees. As mentioned above, McDonald’s aims to provide
exceptional customer service. However, according to a national survey of quick-service
restaurants, McDonald’s ranks next to last in friendliness” (Rotharmel & Arthaud-Day, 2015).
To mend the matter, McDonald’s could establish a universal training program and recruitment
guidelines that all restaurants across the globe need to follow, with some adjustable criterias
matching the countries of training. This training and recruitment program should include
scheduled evaluation and feedback with the employees and possibly a rewarding system so
there is a sense of earnest and healthy competition among employees to ensure a dynamic but
serious working environment. As McDonald’s wage is bare minimum and the workload is
significant, so the company might not be able to attract many experienced skilled workers but
more so students and temporary workers. This could attribute to the lacklustre customer
service delivered. The training and evaluation program should also tackle these aspects, HR
managers should focus on looking for the quality to suit the position instead of just hiring
enough staff to tackle the business.

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