McDonald's in China

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Case Details:

Case Code : BSTR305
Case Length : 20 Pages
Period : 1998-2008
Pub Date : 2009
Teaching Note : Available
Organization : McDonald's Corporation
Industry : Fast Food Industry
Countries : China

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

The origins of McDonald's date back to the 1930s, when two brothers Richard "Dick"J. McDonald and Maurice "Mac"McDonald opened a restaurant called Airdrome in Arcadia, California, that sold hot dogs, tea, and coffee. Encouraged by the good response to their first restaurant, the brothers decided to expand their business...

Global Strategy

After achieving success in the US, McDonald's opened its first international restaurant in Canada on June 1, 1967, in Richmond B.C. This was followed by more restaurants in Germany, Australia, France, and England in the early seventies...

Mcdonald's Enters China

As part of its global expansion, McDonald's decided to enter China as the Chinese market had a huge potential. Over the years, China had witnessed a growth in the urban population, a change in the spending habits of consumers, and the influence of western brands...

Expansion Strategies

The success of the Shenzhen outlet acted as an impetus to McDonald's to expand its chain nationwide. The first big McDonald's outlet and its second in China opened in Beijing on April 23, 1992. The 28,000 square foot restaurant was located in one of the city's busiest shopping areas...

Mcdonald's Operational Strategy

McDonald's standardized operations to ensure the quality and consistency of cuisine at all its restaurants across China. In China, it launched a version of its 'Dollar Menu' known as the 'Value menu' that offered sandwiches and other items at a lower price.

It also introduced a smaller version of the 'Value Meal' that offered small fries and a small drink for just twenty cents. As of 2007, McDonald's outlets that offered 24 hour services in China numbered about 240. These restaurants had attached dessert kiosks for pedestrians...

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