Mcdonald's Case Study Of Mcdonalds In The Chinese Market

940 Words 4 Pages
McDonalds entered the China Quick Service Restaurant (QSR) market in 1990. In 2008, it had 17,500 international sites and was the first to establish international franchising (Barney & Hesterly, 2015, pp. PC 3-54). The opening of the marketplace to foreign investment allowed McDonald’s to capitalize on the changes within China that were leading to economic growth and urbanization. Lessons learned during the expansion into Japan helped with the expansion into China. The increased buying power of the citizens provided broad appeal for investment into QSR; McDonald’s faced cultural and political influences effectively adapting to the China market. McDonald’s is second to KFC in the Chinese market and utilizes very different approaches to expansion and management.
The culture of McDonald’s centers on local control through joint venture, sole proprietorship, and franchising. The local partners are the core to meet and conform to local and national requirements for business within China. Customer behavior in relation to the quick service restaurant parameters of McDonald’s quickly adapts due to such close
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64). McDonalds has value due to its sustained financial resources, established franchise system, logistical systems, and industry saturation. Rarity is an asset in the China market. The number of competitors is limited, and the demand for the product exceeds the ability to meet demand. The use of franchisees is the strength to the rarity in this market. Costly to imitate is yes, because of brand loyalty and other historical success. McDonald’s exploits every advantage available regarding workforce, store locations, relationships, and political connections as resources. The answer of yes to the four questions in the VRIO framework suggests sustained competitive advantage for McDonalds within the China

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