International Marketing Assignment Example | Topics and Well Written Essays - 2500 words

International Marketing - Assignment Example It was started in 1940 by Dick and Mac McDonald as the drive-in McDonald’s Bar-B-Q restaurant in California, with the current restaurant format debuting in 1948 at the same location. In 1949, it introduced its legendary French Fries and Triple Thick Milkshakes. In 1954, the company franchised for the first time through Ray Kroc, which marked the beginning of rapid expansion of its business. In just four years, it expanded from 100 outlets in 1959 to 500 outlets in 1963. It went public in 1965 and began international operations in Canada in 1967. By 1983, McDonald’s operated 7778 outlets and as of 2011, it operates 34000 outlets in 118 countries around the world, of which 80% are franchised (McDonald’s, 2013a; McDonald’s, 2013b). It has 1.8 million employees and is listed in all major stock exchanges such as, NYSE and LSE (NYSE Euronext, 2012; London Stock Exchange plc, 2013). McDonald’s offers a variety of products in its home country of U.S such as , hamburgers, sandwiches, wraps, fried chicken items, salads, oatmeal breakfast, burritos, hotcakes, French fries, coffee, smoothies, yogurt, milkshakes, juices, ice cream, pies and cookies. Most of the products are available worldwide, with a few exceptions. On the other hand, it offers regional products in various countries that are not available in the U.S. Some of the country-specific products include McArabia wrap in the Middle East, McSpicy Paneer burger in India and Bubur Ayam chicken porridge in Indonesia (McDonald’s, 2013c; McDonald’s, 2013d; McDonald'sâ„ ¢ India, 2013a; McDonald's Indonesia, 2013). Rationale behind internationalization Since its inception, profit maximization was one of the prime motives of the business model, besides gaining maximum market share and attaining a vast service network. Throughout its history, McDonald’s Corporation received a hugely positive reception and enjoyed a virtually competition-free environment during its gro wth, with the only direct competitor being White Castle that operated since 1921. The global influence of U.S. and the American culture being perceived as the right way of life also triggered a positive brand image of the company outside U.S., even before it began international operations. Thus, the rationale behind internationalization of McDonald’s Corporation can be summarized as profit maximization, market share maximization, making good use of the positive brand image created internationally and gaining first mover’s advantage in foreign countries. Today, the company operates in 118 countries and is considered as a symbol of American culture (McDonald’s, 2013a; White Castle Management Co., 2013). Mode of entry in foreign countries The different modes of entry that are available to a company are exporting products and distributing through a regional outlet, contracting another company to set up the complete business infrastructure for the entering company in exchange for a fee (known as a turn-key project), teaming up with a local partner to jointly share investments and profits (known as joint