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Multinational Corporation
4
GFMA3083
Multinational Corporations
TOPIC 1
introduction
fact &history
Brief History
San Bernardino
The first McDonald's restaurant was started in 1948 by brothers Maurice (“Mac”) and Richard McDonald in San Bernardino, California.
McDonald's Motivation and Mentalities?
Motivations
& mentalities
Businessmen in different countries demand to have a taste of the American Lifestyle in 1970s. But what else is there?
What motivates McDonald's?
Motivation
- Market Seeking
- 60% of McDonald's business is outside US.
- Economics of Scale
- Less R&D cost due to uniform menu
- Better relationship with Supplier
- Bigger marketing budget
McDonald's Transnational Mentality
Mentality
- Emphasis on local management
- Politically sensitive strategy
- Employment opportunity
- Environmental friendliness
- Donating to local organizations
- Adjusting pricing
McDonald's Strategic Advantages
Compared to other businesses....
Strategic
advantage
Flexibility
Innovation
Corporate Social Responsibilty
Promoting
Relevant
theories
Our target country is ...
Target
Country
Bangladesh
size of market
Population: 164.7 million (2017)
Currency: Bangladeshi taka
Official language: Bengali
Capital: Dhaka
GDP: 249.7 billion USD
GDP per capita: 1,516.51 USD
Economic Growth: 6%
size of
market
Legal/bureaucratic environment
legal/
bureaucratic
environment
- Facilitates imports of raw materials for exporting
- Country of Origin must be noted
- Business might operate in Bangladesh locally or abroad but enlisted in Bangladesh.
- No general local content necessity
- 25% Corporate Tax
Climate for Foreign Business
Economic &
political
climate
- Bangladesh as N11 countries means it is known for opportunities.
- Considered as Least Developed Nation (LDC) which draws in FDI.
- Bangladesh FDI inflow: US$ 308-356 million (1980-1995)
McDonald's Environmental Challenges
Environmental
challenges
- Impact on Global Warming - greenhouse gas emissions from cows as well as damaging the rainforest for raising beef cattle and grains. methane emitted from cattle is a major contributor of global warming.
- Packaging Waste - McD as well as other fast food industries have created so much environmental waste from their burger wraps, drink cups, fry boxes.
Improving our ways & Initiatives
Steps taken
- McDonald's reduced impact on deforestation & carbon emission
- Since 2011, McD claimed 82% of its packaging are made from renewable materials
- "No Straw" Campaign
- Involved in recycling programs.
Socio-CUltural Acceptance
How Does Mcdonalds adapt to different cultures?
Acceptance
With over 37,000 locations worldwide, as an MNC franchise Mcdonalds' specialty lies in the uniform products and by occasionally adding menus that adapts to a country's cultural taste that attracts people that aren't big on the western taste of a standard burger
Example: Bulgogi Burger in South Korea Vs Halloumi Muffin in Saudi Arabia
International
Menu
McDonald's Competitor Analysis
McDonald's Stats:
- Has more than 37,000 locations in more than 100 countries
-Franchised restaurant (uniform menu with a twist of uniqueness)
- Revenue of $22.8 Billion USD as of 2017
Competitor
analysis
Source: Investopedia.com
Starbucks
Competitor's
Stats
- World's largest coffeehouse chain
- Operates more than 28,000 stores in 76 counries
-14.000 stores in the U.S.
None of U.S. stores are franchised
- Revenue of $22.4 Billion USD as of 2017
Second highest earning U.S. chain restaurant
-serves coffee, espresso, cappucino, tea, pastries, sandwhiches and markets itself as high quality products
Burger King
Cont.
-Have more than 16,000 locations in more than 100 countries, with roughly 11 million daily visitors worldwide.
-Owned by independent franchisees.
-The company’s menu includes breakfast, lunch and dinner items available a la carte. Hamburgers, chicken sandwiches, chicken tenders,
-Burger King recorded over $1.2 billion in revenue during 2017
YUM FOOD INC. (Pizza Hut, KFC & Taco Bell)
Cont.
-the company has more than 45,000 restaurants in more than 140 countries 135 countries,
-more than 97% of them are franchised.
-Revenue exceeded $5.9 billion in 2017. Taco Bell serves fast food breakfast and lunch dishes inspired by Mexican cuisine, including tacos, burritos, nachos and related specialty items. KFC serves various chicken dishes and sandwiches, along with sides and beverages. Pizza Hut is a quick-service pizza restaurant chain.
Wendy's
Cont.
-more than 6,000 locations worldwide.
-Its menu includes hamburgers, sandwiches, chicken products and side dishes.
-The company reported 2017 revenue of $1.27 billion,
Strategies
FRANCHISING WITH THE HELP OF JOINT VENTURE
no!
First Branch in Dhaka
Our Decision
Adaptive transnational menu
Food?
Low cost and competitive advantage