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International Business Management
Pages 12 (3012 words)
You are required to analyze your own organization or one that you are familiar with in terms of issues relating to International Business in one or more than one markets. The assignment should use a variety of models and perspectives / theories within your chosen topic as part…
The following report talks about the McDonald’s corporation, its inceptions, values and international expansion. Then, the theories are applied and McDonald’s strategies are analyzed in light of these theories. Later, the issues McDonald’s faces as a corporation as it expands particularly in the developing countries are discussed, followed by specific examples of the challenges, from the past, the external environment has posed on the fast food chain.
The McDonald’s corporation, whose international division was established in the year 1969, today is the largest chain of hamburger fast food restaurants in the world, and serves around 70 million customers on a daily basis in 118 countries. In the 1940 when the company began its operations in the United States under Richard and Maurice (Mac) McDonald, it was a barbeque restaurant. It wasn’t untilm1948 that they decided to reorganize the business as a hamburger joint based on the principles of production line. In 1954 when the milk-shake mixer sales man, Ray Kroc, saw an opportunity in this market and joined the business as a franchise agent in 1955. Ray Kroc negotiated the deal with the brothers and ended up making a franchise deal that gave him the exclusive rights to franchise in the USA. Kroc offered a McDonalds franchise at a price of $950, and took home a service fee of 1.9% of sales. The McDonalds brothers eventually sold out for $2.7million in 1961.
The corporation’s first international venture was in Canada in 1969. International expansion in McDonald’s was accomplished through three different means 1) McDonald’s and its foreign subsidiaries, 2) franchisees and 3) Affiliates. Franchising played a major role at McDonald’s. A major factor contributing to the rapid and successful international expansion for McDonald’s has been the way its franchise system has operated. Over the years the corporation has given immense importance to the training and ...
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