The Globalisation of McDonald's

      Globalisation is every where, three months ago in Shanghai my hometown,I woke up in the morning turned on my Ipod from APPLE (America) and my speaker from SONY(Japan) and drank a bottle of milk from NESTLE(Switzerland) and put on my sneaker from NIKE(America) Those thing suppose to be thousand miles away from me but because of globalisation they all come sloser together.

      

      Globalisation refers to a world in which societies,cultures,politics and economies have, in some sense come closer together(Kiely,1999) ,which means globalisation is not only about products from other countries, it could be cultures, for example,we never do christmas things in China before, but now Chinese people are willing to send christmas presents to friends and family members and decorate christmas trees. it also could be people in China love listening to the songs from Mariah Carey or watching the Downtown Abbey.

Its hard to say whether globalisation is a blessing or a curse,but it does influent our daily life  from many aspects, in this blog I will examine why the globalisation of Mc Donald's are so successful and outline the advantages and disadvantages about it.

Mc Donald's has become not only the largest fast food restaurant organisation, but is a symbol of globalisation. It has 32,000 outlets in 117 countries. Mc Donald's daily customer traffic(62 million) is more than the population of UK. I found a video from Youtube:

                            

WHY?

• Mc Donald's is trying its best stop the cultural change, by changing itself to fit. For example, in Italy Mc Donald's servers mediterranean salads, and fried rice is also available in Japan. In israel there are several kosher Mc Donald's restaurants,and in Mexican outlets sell burritos. These are just a few examples of the decisions made by Mc Donald's to change itself to fit the local culture.
  
  

• Homogeneous market needs and the amount of global customers. Citizens nowadays all live at a busy pace everybody want to get food as soon as possible instead of being in a long queue or spending ages waiting for lunch. Mc Donald's noticed this and take full use of Scientific management theory (Taylorism) on how to train their employees doing the jobs in the most efficient way.

• Transferable brands and advertising---advertisements to attract children all over the world. Mc Donald's especially focus on children's by offering happy meals.

 

 ADVANTAGES:

• More employment opportunities---Mc Donald's has 31,000 restaurant in 119 countries, employing more than 1.5 million people, which is about 1/4 singapore's population ,thus increasing job opportunities world wide.

• Mc Donald's has contributed in giving greater access to a global marketplace of goods by its strong economic influence as they encourage many enterprisesto offer them different services in order to keep up with the demands of people.

• Increases global economy---Mc Donald's invests and supports initiatives to adapt its products and services to different local scales to ensure its global brand,which increases global economy.

  DISADVANTAGES:

• Some local tiny and small industries will be ruined directly--- Due to the high market share in fast food industry occupied by Mc Donald's some chinese traditional fast food chain store were attacked seriously such as Honghong in my home town closed 12 outlets last year because of low profit.

• Cultural convergence---More people are keen on fast food.Besides, more people are moving towards the western fashion, it may affect the life style of local people  for example high reliability on hamburg and coke cola may cause obesity problems.

Ansoff's Matrix

  
         H. Igor Ansoff (December 12.1918- July 14,2002) was a Russian American. He is known as the father of strategic management. Ansoff Matrix is his most famous work.       

         There are three levels of strategy: corporate level,business level and operational level. In this blogger I will introduce the choices of making strategy at the corporate level---ANSOFF'S MATRIX, which sounds quite complex at the first time I heard it.

         After attended the lecture, I found the Ansoff's Matrix was useful for managers to consider how to grow their business through existing or new products or in existing or new markets and it can also help managers to assess the different degrees of risk when they making decisions.

   

        AS is illustrated in the picture, its obvious that Ansoff suggests four different strategies based on whether products are existing or new and focus on whether a market is existing or new. Within each strategy, there is a different level of risk. In this blogger I will focus on one of the strategies-----Market Penetration.

                                                
  
                                                 Market Penetration (Generic Growth)

        Market penetration means to increase the market share by launching existing products in an existing market, which usually achieved by selling more products or by finding more customers. For example, Home Plus (Tesco changed its name in Korea), increased market sales 130% using online technology. Here is a video I found from youtube, its a genius marketing idea in Home Plus, which helps Tesco increased online sales 130% by using online technology.

                             


People can shop at Tesco wherever they are without having to visit the actual store, this idea changed the customers waiting time to shopping time, as a result,through this campaign 10,287 customers visited the online Tesco using smart pone,the number of new registered number rose by 76% and online sales increased 130%. Currently Home Plus has become NO.1 in online market in korea,its obvious that market penetration indicates that a produce has become established and the company is a market leader.

To increase sales and market share, Tesco relaunched its Clubcard, provides the grocer with detailed information about its shoppers. Which gave it a second boost when it doubled the points awarded to shoppers. 

TNS (A market research firm )said Tesco would get another boost from the loyalty card in the coming weeks as Clubcard vouchers are currently being mailed out, putting "coupons in shoppers' hands in the run-up to Christmas".

The latest data from t TNS shows Tesco's market share rose to 30.7% in the three months to november, from 30% in the same period last year. Tesco's sales growth rate was 4.7%, compared with market grow of 4.4% .

But nothing is always blessing, especially when everybody wants to win market share,a price war may be started if competitors cut prices and others follow. This may result in no profit and a failure to successfully penetrate the market.

For example, in 2009 Walmart marks down the prices of 10 bestsellers to 10 dollars when Amazon matched, Walmart went to 9 dollars. Amazon matched again ,Walmart went to 8.99 dollars. Amazon is not able to match.Though target joins the price war and sets 8.99 dollars as well. And then Walmart dropped the price of the oven from 28 dollars to 17 dollars, later the same day, Amazon cut its price also from 28 dollars to 18 dollars. More products Amazon and Walmart sold more they lost actually.

To summarize, the penetration market has advantages and disadvantages,it may create goodwill among first customers and may create customer referrals. It may also discourage new entrances and increase the market share at the same time.But in another hand,it may cause price war and too aggressive price may effect you bran image.

PESTEL---- Social Cultural

PESTEL stands for six forces in general environment, which can affect business management ,they are Political, Economic, Socio-Cultural, Technological, Environmental and Legal factors. Today I want to talk about the effects of changing consumer preference on cosmetic industry based on PESTEL analysis----socio-cultural factors.

                                       THE BODY SHOP----The original "green shop"

                                                 

In recent years people put more and more emphasis on green issues and animal rights and  charity ,The Body Shop is an roll model in the beauty industry, which has 2,400 stores in 61 countries and has its headquarters in West Sussex,England. They have five theories: protect our planet,against animal testing,support community fair trade,activate self esteem  and defend human rights.

                                 

• protect our planet

They launched the campaign of recycling the empty bottles and plastic bags, to improve the awareness of environmental protection ,The Body Shop also is famous for its 3R policy--Reduce Reuse and Recycle.

• Support community fair trade

There are special groups in the company will teach backward areas farmers to grow crops and buy their raw materials at reasonable prices in order to  maintain their stable income and let their children have the opportunities to go to school.Besides, the body shop protect the rain forests and other natural resources. Supporting Community Fair Trade has been one of their core Values since 1987. As is illustrated in the picture in 2010 TBS totally spent 8.9 million pounds on community fair trade.

• Against animal testing
  
  
  

he Body Shop has always been against animal testing – it was one of their earliest and most ground-breaking campaigns, and led to them being the first international

cosmetics brand ever to be awarded the Humane Cosmetics Standard.

Lets look at those two pictures ,the retail sales are around 1470.5 millions in 2012, and the body shop totally owned 2837 stores around the world. Its really a giant organisation, I am a super fan of The Body shop too,not only because their star products are fantastic but also their enthusiastic star theories. Nowadays The consumers prefer healthier and environmental-friendly products, because according to the  PESTLE analysis,which  is not just a simple theory, like PORTER'S FIVE FORCES it is a tool to help organisations to improve their performance,Social -cultural factors,the consumers are changing their preferences. and The Body Shop noticed this idea and took full advantage of it, thats why this company is so successful and has so many fans.