International Fast Food CompanyMcDonalds
In 1953, McDonald’s Fast Foods’ most successful restaurant in Arizona was franchised. Similarly, the restaurant located in California was franchised. The outright success of the McDonald’s was with the entry of Ray Kroc who entered into a partnership with Mac and Dick (Love, 2008). He was given the right to expand the franchise. Owing to this new partnership, McDonald’s opened its new branch outside America specifically Richmond Colombia. This was the first-ever branch outside America. It is amazingly interesting to note that by 1963 the McDonald’s had more than 100 fast-food restaurants worldwide. It was between 1960 through 1970 when significant growth was marked. This may have been due to the massive advertising strategies that were adopted by McDonald’s ads team. Kroc played a major role in advertising McDonald’s products making them the most admirable ads in the world. He also developed the Golden arches logo in 1962. In 1963, McDonald’s introduced the red-haired wit which attracted a massive appeal from children and the youth. Later on, as the years progressed, Kroc opted to buy out McDonald’s brothers for a total cost of $2.7 million. 2. The rationale behind Internationalization McDonald’sinternational strategy is based on the recognition of the available opportunities in the overseas market and not because their home market is already saturated. In fact, McDonald’s established franchised markets internationally because it needed to capitalize on available opportunities particularly among the rapidly growing populations in Asia. It is worth noting that while choosing markets McDonald’s preferred whose prospects for expansion were optimal. For this reason, McDonald’s entered into international markets. When Kroc solely began owning the company, he knew well that the success of McDonald’s fast-food company was dependent on its ability to grow rapidly amid an ever-widening competitive environment. Therefore, he began to offer franchises. As a result, several franchised McDonald’s opened up in various parts of the world. For instance, one such franchised branch opened up in the U.K. in1986. To date, close to 70% of all McDonald’s outlets worldwide are franchised. Today, McDonald’s boasts of having more than 120 restaurants’ and a customer base of over 60,000 people there was a need to employ intensive franchising as a means of promoting products and building a brand name. 3. Market entry strategy McDonald’s Fast Foods Company envisions placing itself strategically with the aim of becoming a superior performer in the world market. McDonalds’ franchise market entry strategy has always been informed by the customer base and room for expansion. In fact, the company is guided by their interest in low production cost while at the same time guided by their choice to serve their customers at their convenience (Pride amp. Ferrell, 2012). It prefers the use of franchise because once the market is established, it will be easier to modify and adapt to customer’s local tastes and preferences. McDonald’s has used this strategy in Saudi Arabia and Indonesia with success.