Global Marketing Strategy Assignment with McDonald’s (GC0345)

Table of Contents

Introduction.

Activity 1.

1.1 A review of the techniques to analyse the environment and an assessment of their suitability

1.2 an analysis of the micro and macro environments of the business using techniques reviewed in the first part of your report

1.3 An analysis of how the international business environment impacts your chosen organisation

1.4 An assessment of the benefits, opportunities and challenges of globalisation on your chosen organisation

1.5 The extent of globalisation on organisations.

1.5 Structures of different organisations operating in international markets.

Activities 2.

Activity 3.

From PowerPoint Presentation 2.1.

From PowerPoint Presentation  2.2.

From PowerPoint Presentation 2.3.

Conclusion.

Bibliography.

Introduction

Global Business strategy is concerned with the important long term policy decision of international firms operating across fronting in the world economy. It can be defined as the business strategies engaged by the businesses, companies or firms operating in a global business environment and serving consumers throughout the world. Global business strategies are closely related to the business developing strategies adopted by a business to meet its short and long term objectives. The short term goals of the business would be related to improving the day-to-day operations of the company while the long term objectives are generally targeted towards increment of the profit, sale and earning of the company, in the long run, ensuring growth and stability of the business and dominance over the national or regional market. (Gillies, 1997).

Activity 1

1.1 A review of the techniques to analyse the environment and an assessment of their suitability

Business environment: It is directly related to the organizational activities and their success. The environment needs to be identifying in the targeted place before starting the business. There are two techniques that are used to examine the business environment within which an organisation is operating:

1. PESTLE analysis
2. Porter’s Five Forces analysis

PESTLE analysis- The Macro Environment

The macro-environment is typically segmented for the reasons for analysis. Organizations do not have any control over the macro-environment. This analysis commonly referred to as a PESTLE analysis. It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. PESTLE analysis provides a framework for investigating and analysing the external environment for an organisation.

PESTLE stands for “Political, Economic, Social, Technological, Legal and Environmental” and it is used for business and strategic planning, marketing planning, organizational change, business and product development and research reports. This analysis tool helps to find out the current status, market growth, direction, potential, and position of an organisation in relation to its external environment and current role. By understanding these external environments, organizations can maximize the opportunities and minimize the threats to the organization. (Alok Goyal, 2009)

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1.2 an analysis of the micro and macro environments of the business using techniques reviewed in the first part of your report

Analysing the business environment of McDonald’s’s by using PESTLE analysis, it is one of the globalized fast-food company in the world.

The figure of PESTLE analysis

There are some factors influencing the business environment as shown above in the figure which are in details as follows:

• Political Factors: The international operations of McDonald’s are highly influenced by the individual country’s policies enforced by each government. For instance, there are certain groups in India, Europe and the United States that clamour for state actions pertaining to the health implications of eating fast food. They have indicated that harmful elements like cholesterol and adverse effects like obesity are attributable to consuming fast food products. The company’s licence is controlling by the local government. For instance, there is an impending legal dispute in the McDonald’s franchise in India where certain infringement of rights and violation of religious laws pertaining to the contents of the food. The existence of meat in their menus in India is apparently offensive to the Hindu religion in the said market. McDonald’s stores have to contend with the issues of employment procedures as well as their tax obligations so as to succeed in a foreign market like India. (Rouse, 2007)

A political factor includes:

• Government policies
• Government term and change
• trading policies
• funding, grants and initiatives
• lobbying and pressure groups
• Wars, terrorism and Conflicts
• Elections and political trends
• Internal political issues
• Inter-country relationships
• Local commissioning processes
• Corruption
• Bureaucracy

Analysis: The Company must also be acquainted with the law in order to know their responsibilities and their possible liabilities. Also, McDonald’s should protect its workers by ensuring all the hiring, compensation, training or repatriation in accordance with the Indian labour laws.

• Economical Factors: The economic environment is a direct influence on all businesses. Exchange rate fluctuations will also play a significant role in the operations of the company. The company’s international supply, as well as the existing exchange rates, is merely a part of the overall components needed to guarantee success for the foreign operations of McDonald’s. The rate at which the economy of that particular country grows determines the purchasing power of the consumers in that country. Hence, if a franchise operates in a particularly economically weak country, their products shall cost higher than the other existing products in the market, then these franchises must take on certain adjustments to maintain the economies of scale. However, in the case of India, the company has been able to maintain a constant level of prices for its products.

Economical Factor includes:

• Local economy
• Taxation
• Inflation
• Interest
• Economy trends
• Seasonality issues
• Industry growth
• Import/export ratios
• International trade
• International exchange rates

Analysis: Ideally before penetrating the market, the company must carry out well-conducted market research, especially in the movements in the economic environment which McDonald’s had done before entering the Indian market due to which the company has been able to bear the frequency of the shifts in the inflation rate as well as the fluctuations in the exchange rates which affects the operations of any company.

• Socio-cultural Factors: McDonald’s has launched a sensibly valued set of food that tenders a reliable level of quality for the respective market where it operates.  In the case of McDonald’s they establish a good system in determining the needs of the market. The company uses concepts of consumer behaviour product personality and purchasing decisions to its advantage which is clearly evident in case of India as the company was quick in removing their Pork, beef, and Mutton products from India’s menu. For example, in India, a country in which the cow is sacred, the menu features McVeggies instead of hamburgers. In Singapore, customers can order a Chicken SingaPorridge; in Hong Kong, some Seaweed Shake Fries. It is said to have a major influence on the understanding of the prospective performance of the organisation in a particular market.

Socio-cultural Factors includes:

• Demographics
• Media views of the industry
• Work ethic
• Brand, company, technology image
• Lifestyle trends
• Cultural Taboos
• Consumer attitudes and opinions
• Consumer buying patterns
• Ethical issues
• Consumer role models
• Major events and influences
• Buying access and trends
• Advertising and publicity

Analysis: McDonald’s should obtain relevant information from the target market in addition to the individual customers of the organisation. It is imperative that before a franchise is granted to a particular market, a well-drafted and comprehensive market research should be conducted initially so as to establish the acts that would conform to good customs, public policies, and morals of the said Country’s society. Similarly, the company should find out the shifts in areas like consumer behaviour and purchasing patterns of the market. Also, the company should constantly survey and learn about local culture to better understand and design the best product for them.

• Technological Factors: McDonald’s generates a demand for its own products. The company’s key tool for marketing is by means of Online Facebook and Google ads, Collaboration with websites like Snap deal and Times deal to promote sales in India, television advertisements, newspaper, banners and hoardings. Following a different kind of marketing techniques and campaign such as the “I’m lovin’ it” campaign, it has become endorsers for McDonald’s worldwide. (Van, 2012)

Technology Factors includes:

• Emerging technologies
• Maturity of technology
• Technology legislation
• Research and Innovation
• Information and communications
• Competitor technology development
• Intellectual property issues

Analysis: The Company must also look into the use of IT to enhance its inventory operations. McDonald’s use the internet to their advantage. The cost-effectiveness, interactivity and real-time effects of the communications are a good way to find suppliers. It is also a good way to correspond with the respective McDonald’s headquarters in every Country.

• Legal Factors: The legal requirement is important because the offenders will be fined or have their business prohibited from operating which can be disastrous. Muslim countries require their meat to conform to the Halal requirements of the law. In the same regard, those that operate in countries in the European Union should conform to the existing laws banning the use of genetically modified meat products in their food. This was the prime reason which forced McDonald’s to eliminate beef, pork and Mutton out of India’s product menu. Other legal concepts like tax obligations, operating hours, business registration, labour and employment laws and quality & environment certification (such as ISO)and quality requirements are only a few of the important elements on which the company has to take into consideration. Otherwise, smooth operations shall be hard to achieve.  (Van, 2012)…………..

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