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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Please note:

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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Excerpts Contd...

Localization Strategy

Chinese customers were loyal to Chinese cuisine and felt that the fast food chains did not offer much variety to suit their palate. The Chinese preferred the traditional culture of food and drink complete with color, fragrance, flavor, and variety...

Challenges

McDonald's faced intense competition in China, its biggest rival being Yum Brands (Refer to Exhibit VI for a brief note on Yum Brands).

Yum Brands' main products used chicken which was traditionally more popular than beef among the Chinese. Compared to its competitors, it had a well developed distribution system that allowed it to have access to places other than main city centers...

Outlook

According to Schwartz, in future, McDonald's China would concentrate on its business in big cities like Beijing, Guangzhou, Shenzhen, and Shanghai and focus on the eastern and central parts of China. He also wanted to add new variations in the combo meals...

Exhibits

Exhibit I: Growth of McDonald's
Exhibit II: McDonald's International Expansion *
Exhibit III: Fast Food Industry in China
Exhibit IV: Global Comparable Sales (Percentage Increase)
Exhibit V: Dining Habits in China
Exhibit VI: Yum Brands in China


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