International Business Strategy: McDonalds in India - Essay Example

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This essay explores the entry of McDonalds Corporation into India that came at the right time following the market trends that began to emerge in India. The region was showing a promising market in the food service industry despite the differences that were likely to be encountered. …
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International Business Strategy: McDonalds in India
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Download file to see previous pages The researcher states that a business organization definitely operates in some environment that is often not static but exhibits some dynamism. An important theory of management then focuses on how a firm is able to adjust its operational strategies and organizational structures in order to cope up with the environmental changes. The environment also varies with different market locations across the globe. Strategic business planning then involves collecting the information about an organization and examining how the internal abilities of the firm can be married to the prevailing external environment in order to gain a competitive advantage. Environmental analysis involves industry analysis and PEST analysis. The industry analysis entails an examination of the business environment in which the business is to operate focusing on the competitors, the clients, and the suppliers of the organization. Similarly, the political, economic, social and technological factors in a given business environment also affect the success strategy development and operations of an organization. Different countries have difference level of economy and technological advances as well as socio-political developments. PEST analysis is appropriate for this analysis. The internal and external factors can also be examined through a SWOT analysis of the company. McDonald’s is one of the world leading food service retailers with its headquarters at the United States. The company has more than 33000 restaurants and serves about 68 million people daily in over 119 countries across the globe. ...
Analysis- Porter’s Five Forces Several factors affect the operations of an organization in the food service industry in the US and across the globe. Porter’s Five Forces assess the nature of competition in a given industry and describe the attractiveness and profitability of the industry. The five forces include threat for new entrants, threat of substitutes, bargaining power of buyers, bargaining power if suppliers, and degree of rivalry among the existing competitors (tutor2u, 2012). The threats of new entrants into the restaurant industry in the US are high due to low barriers to entry and large numbers of entry candidates (Espire Marketing LLC, 2011). New restaurants are opened daily since the customers often opt for new and different places to eat. The little government regulations in the industry, lack of patent/legal protection, and relatively similar technological efficiencies contribute to the low barriers to new entrants (Espire Marketing LLC, 2011). These conditions also apply in most of other foreign markets. There are little or no threats of substitutes in this industry. Food is a basic commodity for which the clients have no alternative (Espire Marketing LLC, 2011). The threat of substitutes only comes in during the selection of food items in the menu. The buyers’ bargaining power is relatively high in the restaurant industry, and thus, for McDonalds (Espire Marketing LLC, 2011). The customers can easily shift to other restaurants and so the company must be sensitive and quick to respond to the customers’ changing needs and preferences in order to maintain this relationship. The buyers are particularly powerful because they have low switching costs of choosing another restaurant for similar services (Espire Marketing LLC, 2011). McDonalds has ...Download file to see next pagesRead More
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