McDonald's Global and Local Strategy

Introduction

• McDonald's is a leading global fast-food company with standardized products.
• Benefits from economies of scale and global branding.
• Needs both global and local strategies despite its global operations.

Reasons for Local Strategy

1. Cultural Dietary Preferences

   • Beef is central to McDonald's menu, but not consumed everywhere.
   • Examples:
     • India: Reverence for cows, hence no beef.
     • China: Regional preference for chicken over beef.
   • Local menu variations required (e.g., vegetarian dishes in India).

2. Local Competition

   • Different countries have developed unique fast-food chains.
   • Example:
     • Wendy's in New York, but not in South Africa.
     • Nando's in South Africa, but not in New York.
   • McDonald's must position itself against local competitors.

3. Local Laws and Regulations

   • Governments have different regulations on food sales.
   • Example:
     • Beer sold in Spanish McDonald's, but illegal in the UK.

4. Franchise System

   • McDonald's operates with a franchise model in many countries.
   • Franchising involves a cooperative strategy with franchisees.
   • Challenges:
     • Franchisees need motivation and incentives.
     • Local promotions and marketing budget managed by franchisees.

5. Local Service Quality

   • Products are cooked and served locally with local staff.
   • Standardized equipment but local management and delivery.
   • Extensive training (e.g., Hamburger Universities) and quality monitoring.

Conclusion

• McDonald's must blend global and local strategies for success.
• Emphasizes the importance of local adaptation within a global framework.
• Local operations are crucial to delivering McDonald's global standards.