Creating a successful business in one country is a challenge. So much depends on knowledge of your market, their preferences, customs and sensibilities. Taking a company global can therefore seem like an impossible task.
There are several examples of companies’ failure to succeed in foreign markets, including an ill-fated campaign by Pepsi in China. Their slogan ‘Pepsi Brings You Back to Life’ was mistranslated as ‘Pepsi brings your ancestors back from the grave’ – a particularly bad mistake when you consider the importance of ancestors in Chinese culture. You can read about some of the other challenges of the global marketing landscape here.
Some organisations, on the other hand, have managed to expand into markets all over the world. What is it that makes certain brands work so well on a global scale where others have failed? We looked at one of these success stories and all the things they did right to get where they are today.
Demographics
McDonald’s is company that needs no introduction. In terms of revenue, it is the biggest restaurant chain in the world serving over 69 million customers daily in over 100 countries across 37,855 outlets as of 2018. Founded in 1940 in San Bernardino, California, McDonald’s has managed to not only survive but thrive globally – how exactly have they managed it?
First and foremost, McDonald’s effectively invented the modern franchise model. This allows its franchisee-members, management and shareholders to share the risks and rewards from the discovery and exploitation of new business opportunities.
However, the most important way they have achieved global success is by adapting over time and to the cultures of different countries. As Forbes puts it, by ‘coming up with fresh products and services to address the needs of a diverse consumer market – as shaped by demographic, economic and local factors around the world.’
As a company, they have capitalised on events in America, such as the baby-boom in the 1960s, which was accompanied by swelling ranks of teenagers and rising female labour force participation. To this demographic they offered fast food for a good price.
Localisation
In the 1970s and 1980s, globalisation allowed them to sell the ‘American Dream’ internationally. They supplemented this by adapting ‘to the social context of each country by franchising to local entrepreneurs.’
There are items on the menu in Japanese McDonald’s that you don’t find in the UK, including the Grand Teriyaki Burger, Shrimp Filet and the Pork and Ginger Burger. In Britain, their marketing focuses on ingredients, pushing the 100% Irish and British beef label.
With the shift towards healthy eating in recent years, they have once again pivoted by expanding their product portfolio. McDonald’s now offer good quality coffee and healthy drink options, taking on Starbucks’ ascendency.
Throughout all this, consistency has been a byword – the brand is instantly recognisable and has a specific aesthetic, from their advertising to their physical restaurants.
However, by taking localisation into account, they have managed to become globally successful. If they continue in this same vein, adapting to changing attitudes, food trends and local customs, they will likely continue to be so for many years to come.
Our MSc International Business covers ‘Global Strategy’, where you will investigate organisations’ ventures into the global business arena through case studies whilst applying the latest theories.
To find out more about the programme please visit the course page.