Macdonalds

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McDonald's, originated in California, USA, 1954, operates fast food restaurants all over the world ,has become one of the most recognized and respected brands in the world. The company is the world's largest food service, retail store chains, food preparation and service areas. All McDonald's restaurants offer a standard menu, including such as hamburgers, cheeseburgers, chicken sandwiches, French fries, salads, milkshakes, desserts and ice cream sundaes.(www.McDonalds.com)

The McDonald's business structure is based upon a geographic structure. The company's business is divided into four geographic sections: Europe, the United States, Pan-Asian non-(Asia, Pacific, Middle East and Africa), as well as other countries and companies,which is including Canada and Latin America. In 2002, the company operated more than 30 thousand fast-food restaurants in over 100 countries in following parts: the United States, Europe, Asia-Pacific, Middle East and Africa (Pan-Asian non-), Latin America and Canada.

Pie chart shown above, approximately 65% of McDonald's restaurants, about 75% of the income is produced in the United States and Europe. Therefore, to MacDonald, the most important strategic method to maintain its leading position is while protects its staple market to expand their business to let it enter the emerging market. However, different countries have different consumer groups may have very different tastes and / or demands. Therefore, that required MacDonald's in each full geography unit should to respond completely in that region production and market. Through this regional structure, McDonald's can not only meet the needs of local consumers in different geographical regions, but also the pursuit of the highest local development '. In fact, they produce and sell slightly different types of products in different areas, they even sold it at different prices level. And McDonald's target consumer market, similar to the need for fast service, reasonable prices and good standards of hygiene. Therefore, their main products are similar in most countries, where they provide services, including beef, chicken, potatoes, bread and milk. Just as consumers in different countries have different requirements of food, McDonald's has introduced some new products for their regional customers'.

In order to maintain market share, increase sales and profits. McDonald's has to adopt measure to response of its competitors. In 2003, McGriddles sandwiches and feature breakfast have been offered in the US and the Canada. At the same time, McChicken Premiere and a splendid chicken introduced in the United Kingdom, France, Italy and Belgium. McDonald's trying to satisfy customer's desire for the high-quality products at reasonable prices. In addition, McDonald's offer 'Happy Meal' with more choice to keep children. Such as Happy Meal, now includes the option of chicken meals, no sugar, add fruit juices (fruit juices and low-fat drink), and also provide more choice of McDonald's coffee to adult. These products have attracted existing customers and develop new customers. In addition to the innovative menu, McDonald's is relocated and rebuilt, and make the environment more attractive. At the same time, McDonald's through creates the even more related experience to differentiate itself for example to allow the customer to visit has the wireless technology platform Internet.

McDonald's in China:

In 1990, McDonald's opened in Shenzhen of the first store. McDonald's has grown to 2012 stores cover 25 provinces and municipalities in 2008 and plan to open 500 new locations in next three years. (Yan and Li, 2009). McDonalds' in China can charge a premium price through providing high quality products to achieve their ownership advantage. In China, the labour input is less costly and natural resources can be easily get to produce the product for their location advantage. McDonald's China emphasis on Quality, Service, Cleanliness and Value. Therefore, McDonald's is perceived as scientifically clean environment by Chinese customers. And the food is also considered safer than traditional road side food. In China, Modifications in the menu is other key strategy in business practices and the approach in which McDonald's management overseeing the operations in China advertises. For instance, adding the teriyaki burger to meet the demand of consumers. Many customers will not realize McDonald's is and American Corporation for it accustomed to the Chinese culture. At first, McDonald's through having 50% local ownership and purchasing local product to present itself as a Chinese corporation. McDonald's invest in local schools, give scholarships and awards competitions. Now McDonald's director is trying to remake McDonalds being a foreign. McDonald's in several cities run 24 hours every day .McDonalds' has absorption the Chinese cultural and showing understanding, respect and assimilation.

McDonald's in Australia

McDonald's in Australia, operating 715 restaurants by the end of February 2002. As people continue demand of fast food and increasing spending power, the demand for McDonald's products is increasing. This is not surprising, 1990s McDonald's already accounted for 62 percent of restaurants in Australia. McDonald's Australia is a subsidiary of McDonald's USA. In its global operations, McDonald's either subsidiaries or joint venture partner of McDonald's. USA McDonald's has been franchising. The main way of doing business is committed to franchising. 70 percent of McDonald's restaurants in Australia are owned and franchise. In December 2000, a total of 483 franchised stores and 301 franchised owned. McDonald's positioning, development and construction of restaurants and owners of facilities all should according to McDonalds' standard. In order to maintain these standard, McDonald's should use McDonald's recipes and specifications for menu item , use McDonald's trademark and logos, meet McDonald's standard. To achieve outstanding product quality, McDonald's have developed cooperation with local supplier, founded McDonald's Lettuce Grower Teams at Gatton in Queensland and Werribee and Lindenow in Victoria.( www.mcdonald's .com.au)

Kentucky Fried Chicken ( KFC)

Kentucky Fried Chicken (KFC) was established by the Harland Sandlers1952 years with Pitehaman Company as a franchise. His unique formula of fried chicken was formerly a great success. And KFC restaurant expand in many countries around the world. Today, Kentucky Fried Chicken in more than 100 different countries around the world, including the United States largest market in the European market presence and expand the largest market in Asia. As of 2008, Kentucky in 5253 united in the United States, and 10327 units outside the United States. KFC fried chicken restaurant in the United States provide chicken sandwiches (including the Snacker and cyclones), KFC famous bowl, Colonel Crispy belt, chicken wings, chicken and popcorn, seasonal, large pieces of chicken pot pie. KFC restaurants in the United States also provides a variety of side-effects of the project, such as biscuits, mashed potatoes and gravy, coleslaw, corn and French fries, and desserts. (www.kfc.com ). These products also provide outside of the United States, however to adapted to local preferences and tastes, KFC offer some international menu.

KFC in China

The competitive situation in China between McDonald's and KFC is not same as in the world. Without a doubt, McDonald's is" the boss" of fast-food restaurant in the world, which has more than 30,000 stores worldwide and turnover of about 40.63 billion U.S. dollars in 121 countries. While the KFC has only 11,000 stores around 80 countries in the world. However, in the Chinese market perspective, the two competing trends are different; McDonald faced a strong challenge from KFC.KFC run more stores, owned larger market share and achieved higher profit, has changed into a leader from a follower in China.

Kentucky Fried Chicken has become the most popular fast-food restaurant in China since its first Western-style fast food outlet opened in Tiannanmen Square in Beijing in 1987. Within the next two decades, more than two thousand other restaurants sprung up across China. As the customer mania report (2003) shows,"China continues to be our Rising Star, driving double digit sales growth for the fifth consecutive year and record operating profit up over 42% in 2003." According to Liu (2008), the most prominent success of KFC in China can be attributed to 4 key ingredients: context, people, strategy and execution.

In fact, KFC's main product, the chicken was very natural advantage, because most Chinese people like pork, then chicken, and beef and mutton are lagging far behind. Thus, in this perspective, KFC's natural product is better than McDonald's. Although KFC's original recipe has been accepted by most Chinese, KFC did not stop there. New products in KFC are more frequently introduced to Chinese consumer than their rivals. KFC's product strategy in China is divided into two aspects. 1. In order to satisfy consumer desire to innovate, KFC introduced, like Mexican Chicken Warp and New Orleans Barbeque Wings of these Western-style products. This can achieve those young consumers demand that are willing to accept foreign flavours. 2. Through provides the Chinese style fast-food to cater to the consumer for the traditional Chinese food taste from time to time, like Beijing chicken rolls, a wrap, with Beijing duck, but follows the Sichuan spicy chicken which with the fried chicken and absorbs the Sichuan plate hot mileage surface with the onion and the seafood sauce. In addition, in order to attract the old-age consumers who like Chinese food and need convenience service, KFC has provided the Chinese-style breakfast menu in China. The breakfast chooses the eastern mix and west, the scope bows from the Chinese seafood and the chicken, Hong Kong tea with milk to the western Hamburg, potato stick and orange juice (Adler 2003).

In addition, there are other ingredients for the success of KFC in China. For example, in the late 1980s and early 1990s, KFC had no alternative but to see a local joint venture partner. KFC select joint ventures to connect government and effectively used their tangible and intangible local resources to develop their market. Once joint ventures were no longer required by Chinese regulations, KFC transferred adopts the sole ownership and completely control of their resource, decision-making and the destiny. According to local market needs, to meet the customer needs to provide the best localized products, services and dining environment promptly.

KFC in South Africa

South Africa is one of the KFC largest markets with over 300 restaurants. KFC's opened its first store in 1995 in Johannesburg. Their outlet expanded more rapid than any other country in following two years. In 2000, there were 103 in all parts of the country but nearly always in urban area. In fact, in South Africa, KFC has formulated a very effective strategy, it is for customers when their eating, shopping and entertainment. The idea places the key point on high profile and highly filled, citing infiltration. KFC has more drive-troughs compare to Australia and United States. The drive-through restaurants are become much attractive and give competitive edge in South Africa. ( Webb 2000). KFC South Africa centralized at convenient locations such as shopping malls and other areas, including villages and towns. The target of customer of KFC is all economic levels, from high-income to low-income.

Conclusion

McDonald's and KFC are clear example of how the company's strategies should be changed to cope with the different business environments. Multinational Corporation plays an important role in facilitating this economic growth. In order to be successful in different region, these companies realized that they have to find a model that is both internationally competitive and understanding of local culture.

Reference:

  • Adler, C., 2003, Colonel Sanders' March on China. Available from: http://www.time.com/time/asia/magazine/article/0,13673, 501031124-543845,00.html Euromonitor International: Local Company Profile, 2009, McDonald's China Development Co Ltd-Consumer Foodservice-China Euromonitor International: Local Company Profile, 2009, McDonald's Holdings Co (Japan) Ltd -Consumer Foodservice - Japan MacDonalds 2000 Annual Report www.macdonalds.com Liu, W. 2008. KFC in China: Secret Recipe for Success . Singapore: John Wiley& Sons (Asia) YUM! BRANDS 2003 ANNUAL CUSTOMER MANIA REPORT Available from: http://www.yum.com/INVESTORS/annualreport/03annualreport/pdf/yum_annualreport03.pdf Yan, F and Li, H., 2008, McDonald's Eyes 500 Stores in China in 3 Years. Webb, D., 2007 McDonalds a Hit in SA Business Times http://www.btimes.com www.McDonald's.com
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