International Marketing of McDonalds

Analysts predict that by 2010 the fast food segment will account for half of all food service growth during the first decade of the 21st century. McDonald’s has been able to capitalize on this trend and expand globally.
Their international operations are very significant to them because a sizeable portion of revenue is generated through franchisees. While the US and Europe each account for 35% of the revenues, France, Germany and the UK collectively account for 60% of the total revenue. In Australia, China and Japan, they have 50% owned-affiliate account under the equity method which accounts for nearly 50% of the revenues. These six markets are the major markets for the company.
More than 70% of McDonald’s restaurants are owned and operated by independent local people. At the end of 1006, the company had 31,046 restaurants in 118 countries out of which 18,685 are operated by franchisees, 4195 by affiliates and 8166 are operated by the company. McDonald’s, the leading global food retailer, serves 52 million people each day.
Since most of its restaurants are franchised, they do not have a director in charge of international operations separately. Instead, they have different heads in charge of specific regions. For instance, they have a President – Europe supported by four different Presidents in charge of Eastern, Northern, Southern and Western Divisions. To handle other regions they have President – Asia/Pacific, Middle East, and Africa. &nbsp.They claim to be committed to listening to the customers and to being open and direct about facts surrounding the food, people and the restaurants. McDonald’s has frequently been accused of resorting to unfair and unethical business practices. While McDonald’s has often been accused on various grounds, the beef-fries controversy in 2001 revealed the negligent and the irresponsible way that is unexpected of a global player of the magnitude of McDonald’s.
McDonald’s initially declined to comment and then issued a ‘conditional apology’. As the people became more violent, the company kept changing their approach. This adversely affected its brand image. McDonald’s follows the ‘Code of Federal Regulations’ which does not require the restaurants to list the ingredients (Mukund, 2002). The French fry suppliers do use a small amount of beef flavoring agent as an ingredient in the raw material. The ingredients in ‘natural flavors’ need not be broken down. This was their initial reaction but when there was an upsurge created, they reacted saying that they never claimed that the fries sold in the US were vegetarian but this claim of theirs was also subsequently proved wrong. They went on the defensive instead. They were blamed for deceiving millions of people who may not want to have beef extract in their fries for religious, health, ethical or other reasons.
In the fast-food outlet sector, the management is faced with the dual challenge of providing high standards of service to the satisfaction of customers both at home and across borders with their own cultural differences. According to Ritzer (1993), the fast food segment is the organizational force representing and extending the process of rationalization and encroaches on individual identity (cited by Keel, 2006). McDonald has been charged with undermining cultural diversity and destroying the viability of local communities (Rifkin, 2001) for example, in India, consumers recently trashed McDonald’s restaurants for violating Hindu dietary laws.