Business Environment International
9-read the case study :why would mcdonalds use to joint ventures to operate restaurant in different regions of india ? (400 words)
Case Study: Global profits are a menu mainstay at McDonalds Few U.S. businesses are as international as McDonald’s, the Illinois-based fast-food giant that began as an all-American hamburger place. With $22 billion in annual revenue, McDonald’s now rings the world with 32,400 restaurants and serves 60 million customers every day. Although the United States accounts for 35 percent of McDonald’s global revenue, Europe accounts for 41 percent and the Asia/Pacific, Middle East, and Africa regions account for 19 percent.
Hamburgers are, of course, the main attraction in many McDonald’s restaurants: worldwide, the company sells more than four million burgers every day. However, one of McDonald’s key strengths is its ability to adapt to local tastes. In Japan, McDonald’s sells Cheese Katsu sandwiches, featuring fried pork and cheese. In the Middle East, it sells McArabia pita sandwiches filled with grilled chicken or spiced beef. In France, it sells Croque McDo sandwiches with melted cheese and ham. In India, it sells vegetarian McAloo Tikki burgers. In Mexico, it sells McMolletes sandwiches made with refried beans and cheese. Being a global business also helps McDonald’s weather the economic ups and downs of different regions. At one point during the recent recession, its Asian revenue grew almost twice as quickly as its European revenue, both of which balanced the smaller increase in U.S. sales. Worldwide, McDonald’s owns some of its restaurants and also sells franchise licences to firms that open restaurant under the McDonald’s brand name. In some markets, the company operates restaurants in joint ventures with local firms. For example, in India, it has one joint venture with a local firm to operate restaurants in the west and south and a second joint venture with a different company to operate restaurants in the east and the north. The company is also building its global business by attracting more customers during different “dayparts,” such as at breakfast time and in the late-night hours. A growing number of its global units stay open 24 hours a day for customer convenience. McDonald’s has introduced a steady stream of breakfast, beverage, snack,
and sandwich items to encourage repeat visits from customers at all income levels.
On the high end, McDonald’s is doing well with its McCafés, which serve mochas and other gourmet coffees in a separate area of selected McDonald’s units. As the company opens new restaurants and remodels existing restaurants, it is adding more McCafés in U.S, and European markets. The Angus Burger is another popular premium menu item. Both McCafé coffees and Angus Burgers appeal to customers willing to pay a
little more to splurge on high quality. At the same time, the items on McDonald’s budget menus are priced to appeal to customers who keep a close rein on their wallets.
Being a major power in global business means McDonald’s must think carefully about the value of the different currencies its restaurants take in. Outside the United States, much of its revenue is rung up in euros, British pounds, Australian dollars, and Canadian dollars. As a result, McDonald’s pays close attention to swings in foreign exchange rates as it manages its financial affairs. McDonald’s is stepping up its involvement in sustainability all around the world. It has increased its use of packaging made from renewable materials and boosted recycling efforts to keep waste out of landfills. It has also been building eco-friendly restaurants in north and south america as well as in europe to test green construction methods and cut back on energy and water usage .the company’s social responsibility menu beverages plus healthy snack choices .
From india to ireland .Argentina to Australia , Mcdonalds is poised for continued growth in sales and profit as it expands its restaurant empire and cooks up new product to enjoy around the clock and around the world
