SAINT JUDE CATHOLIC SCHOOL

SENIOR HIGH SCHOOL

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ORGANIZATION AND MANAGEMENT

First Semester, 2nd Quarter
S.Y 2020-2021

PERFORMANCE TASK 3: SWOT ANALYSIS AND PEST ANALYSIS

TOPIC: PLANNING

DIRECTIONS:
Read the following case. Analyze the strengths, weaknesses, opportunities and
threats that the organization faces. Align the SWOTS to political, economic, social and
technological aspects that the organization would have to consider and address. Use the
charts as your guide in determining the factors asked for. At the end of the charts, briefly
describe the key factors that help the company grow and recommend corrective actions in
addressing the challenges.

How McDonald’s Adapts Around the World

Bernardine Racoma

McDonald’s was born in San Bernardino, California in 1940. It started as a fast food restaurant
by brothers Maurice and Richard McDonald. From being a restaurant the owners turned the
business into a hamburger outlet before exploring the franchise business. They started using the
logo named Golden Arches in 1953. After joining the company in 1955, Ray Kroc purchased the
McDonald’s chain. Its new headquarters is located in Chicago, Illinois.

In terms of revenue, McDonald’s is considered as the biggest restaurant chain in the world. As of
2017, it has 37,241 restaurants around the world. While its main menu offerings consist of
hamburgers and fries, the fast food chain serves other items, including milkshakes, soft drinks,
desserts, breakfast fare, products made with chicken and wraps.

Consumer tastes change and the company respond to the changes by offering healthy food. To
counteract the perceived unhealthiness of their main menu offerings, McDonald’s also serves
fruits, smoothies, fish items and salads.
 Like other companies, McDonald’s also faced some challenging times. Still, the company was
able to withstand the drawbacks, making it one of the most successful fast food franchises in the
world. It’s interesting to know how McDonald’s maintains its success.

How McDonald’s adapts to different cultures

The key factors for McDonald’s success in different countries are adaptation as well as
innovation. The company comes up with a variety of services and products catering to the needs
of a consumer market that is widely diverse, basing their offerings on consumer
demographics, local and economic factors, for example:
 McDonald’s offered fast and low-priced menu to cater to women joining the labor force
and the increasing teenage population in the 1960s.
 Joined the trend of going global in the 1970s and the 1980s by bringing the “American
way of life” to several countries around the world by adapting to the social setting of every
country they entered via franchising to local entrepreneurs.
 Improved the company’s corporate image by introducing the ”fast and
convenient” strategy by adjusting the product listing based on the trends in the food industry.
McDonald’s renovated their restaurants to gain a united, up to date environment with a natural
dining look and feel. The concept they introduced was supported by offering natural and
healthier elements through the addition of vegetables (such as carrot sticks), fruits and salads.
 The company’s innovation continues through additional products, such as healthy drinks
and coffee of high quality, competing directly with local cafés and coffeehouse chain, Starbucks.

McDonald’s marketing strategy for international success

Despite being a fast food chain that mainly serves beef hamburgers and French fries, aside from
the new additions, it is surprising that various countries accepted the international food franchise.
McDonald’s has outlets in all the continents, operating in more than 100 countries.

What is the secret to the company’s international success?

McDonald’s is an example of a company that gained tremendous benefits from globalization. Of

course, it is largely due to the dual marketing plan of the company:
1.     Standardization strategy
Anywhere the company operates, it offers identical food products such as McFlurry, McNuggets,
McChicken, Happy Meal or Filet-O-Fish. The plan provides the company with a strong image.
The strategy is a time and money saver for McDonald’s as it helped build economies of scale.

2.     Adaptation strategy

The strategy can be compared to localization. With this strategy, McDonald’s adapts to the needs
of the consumers as required by the cultures of specific countries.
 Adaptation works very well for McDonald’s. The strategy enables the fast food chain to have a
wider reach worldwide. The strategy does require higher communication and production costs.

Aside from the winning strategies, the company’s marketing mix is likewise flexible, in order to
tailor it to the local market requirements in terms of location of distribution, promotions plans
and pricing.

How McDonald’s fares and adapts in other countries

As a global business brand, McDonald’s strategies likewise employ other strategic marketing
tactics such as segmentation and experimentation/product testing. Comparing the strategies for
the American market and the Japanese market for example, you will see a big difference.

 In the United States. McDonald’s spends the biggest slice of their budget. The company
does many new product trials and innovation in its home country, where it has the biggest
audience. The company’s advertising is typically skewed to children in the United States, where
McDonald’s produces about 250 ads annually.
 In Japan. The company’s ad campaigns are widely different. The Japanese ads are
focused on adults as well as children, with some features that are unique to the locale’s culture.
McDonald’s is able to adapt its menu and business plans to each culture. It shows that it respects
the differences between cultures and adheres to the country’s policy when they develop
additional items for their menu.

The company does product tests and experimentation through the addition or removal of food
items based on local trends and popularity among consumers.

In the U.S. McDonald’s offers McRibs for a limited time. In Japan, the Teri Tama Burger is a
spring menu item while the Tsukimi Burger is offered in autumn.

The localized marketing plans work great for McDonald’s. For the Japanese market, it adjusts its
name for katakana (used for foreign words) by using the name Makudonarudo, which not only
sounds attractive but also quite appropriate.
Because the appetite of the Japanese differs from the Americans, the serving sizes of burgers,
fries and drinks in Japan are smaller.

Adapting to the Chinese market

China is a big market for McDonald’s, considering that it has 2,700 outlets in China. In typical
fashion, it adapted to local tastes and preferences. Instead of meat from chicken breasts,
McDonald’s uses meat from chicken thighs in its chicken burgers because it’s the locals’
preference. Grilled Chicken Burger is a meal offered during Chinese New Year, which is
served with curly fries and Chinese horoscope with the 12 animal signs.
Aside from the regular sauces such as Honey Mustard, Sweet and Sour and BBQ, McDonald’s
China’s Chicken McNuggets also have Chili Garlic Sauce. Soups like Corn
Soup and Vegetable and Seafood Soup were added in 2001.

Examples of McDonald’s adaptation through collaboration and innovation

The company’s marketing research is exhaustive, providing it with all the means to engage and
embrace a wide variety of cultures while still maintaining its strong brand image. McDonald’s
Golden Arches logo is easily identifiable wherever you go.

It’s very interesting how it adapts to different cultures, which is a valuable lesson in marketing.
Here are some examples:

1.     Germany
Because Germans love to eat meat, its burgers combine Nürnberger sausages with beef. And it’s
a known fact that Germans love their beer with food, so McDonald’s outlets in Germany also
serve beer.

2.     Indonesia
The majority of the population in Indonesia is Muslim, therefore, McDonald’s adapted to the
eating needs of the population by replacing pork with fish. McDonald’s outlets in Indonesia are
Halal and since Indonesians prefer rice over bread, they serve rice as well, together with some
spicy meals that locals prefer.

3.     India
India has a very large consumer base and McDonald’s adapted its menu to cater to the locals’
tastes and preferences. Beef is replaced with chicken. The Maharaja Mac is the local version of
the standard Big Mac. To cater to vegetarian consumers, McDonald’s in India offers Masala
Grilled Veggie Burger, McAllo Tikki and McVeggie. In 2013, the company opened its first
vegetarian restaurant to cater to the local vegetarian consumers. One of McDonald’s India’s
features is the McCurry Pan, a baked menu item with curried vegetables.
4.     Morocco
In Morocco, pita bread sandwiches are available. The outlets also use traditional spices such as
coriander and cumin. McDonald’s offers special menu for Ramadan. They call it f’tor (end of
fasting) and the meal consists of a Big Mac, milk, dates and traditional Moroccan soup.

5.     Japan
 Japanese cuisine is very different from the rest of the world. In the initial stage, McDonald’s in
Japan retained the menu for the U.S. market. But slowly it replaced and added menu items to
cater to Japanese preferences. The company introduced Green Tea ice cream, Rice Burger,
Seaweed Shaker and Teriyaki Burger. The Japanese McDonald’s franchise also added shrimp
burgers, shrimp nuggets, milkshakes flavored with green tea and breakfast meal with hotdogs,
mustard, ketchup and relish.
6.     Switzerland
The McRaclette is only served in McDonald’s outlets in Switzerland. It is a beef sandwich with
raclette cheese, unique raclette sauce, onions and gherkin pickles.

McDonald’s presence in different countries

As a global brand, it is understandable that McDonald’s present worldwide. According to the
company’s website, it operates in 101 countries as of January 2018, serving 69 million
consumers each day. It employs 1.9 million people. Its revenue reached $22.8 billion in 2017.

From the available data, here is a partial list of the countries and territories worldwide where you
can find a McDonald’s outlet (number of outlets indicated).
1. United States (14,146)

2. Canada (1,450)
3. Puerto Rico (108)
4. S. Virgin Islands (6)
5. Costa Rica (4)
6. Australia (920)
7. Guam (6)
8. Japan (2,975)
9. Netherlands (245)
10. Panama (57)
11. Germany (1,476)
12. France (1,419)
13. El Salvador (20)
14. Sweden (197)
15. Guatemala (94)
16. Curacao (5)
17. United Kingdom (1,274)
18. Hong Kong (237)
19. Bahamas (3)
20. New Zealand (166)
21. Switzerland (167)
22. Ireland (89)
23. Austria (193)
24. Belgium (74)
25. Brazil (930)
26. Singapore (136)
27. Spain (507)
28. Denmark (89)
29. Philippines (572)
30. Malaysia (271)
31. Norway (73)
32. Taiwan (413)
33. Andorra (5)
34. Finland (65)
35. Thailand (240)
36. Aruba (4)
37. Luxembourg (10)
38. Venezuela (133)
39. Italy (571)
40. Mexico (402)
41. Turkey (251)
42. Argentina (222)
43. Macau (27)
44. Serbia (30)
45. South Korea (450)
46. Hungary (88)
47. Russia (645)
48. China (2,700)
49. Chile (77)
50. Indonesia (170)
51. Portugal (148)
52. Greece (23)
53. Uruguay (21)
54. Martinique (9)
55. Czech Republic (98)
56. Guadeloupe (8)
57. Poland (405)
58. Monaco (2)
59. Brunei (3)
60. Morocco (41)
61. Northern Marianas (2)
62. Israel (185)
63. Slovenia (20)
64. Saudi Arabia (263)
65. Kuwait (72)
66. New Caledonia (2)
67. Oman (23)
68. Egypt (104)
69. Bulgaria (42)
70. Bahrain (23)
71. Latvia (12)
72. UAE (165)
73. Estonia (10)
74. Romania (70)
75. Malta (10)
76. Colombia (81)
77. Slovakia (30)
78. South Africa (252)
79. Qatar (42)
80. Honduras (11)
81. Sint Maarten (3)
82. Croatia (30)
83. Samoa (1)
84. Fiji (4)
85. Liechtenstein (1)
86. Lithuania (13)
87. India (290)
88. Peru (40)
89. Jordan (31)
90. Paraguay (19)
91. Dominican Republic (31)
92. French Polynesia (6)
93. Belarus (15)
94. Trinidad & Tobago (6)
95. Ukraine (80)
96. Cyprus (18)
97. Jersey (1)
98. Ecuador (27)
99. Reunion (4)
100. Isle of Man (1)
101. Suriname (2)
102. Moldova (5)
103. Nicaragua (6)
104. Lebanon (23)
105. Pakistan (60)
106. Sri Lanka (7)
107. Georgia (14)
108. San Marino (1)
109. Gibraltar (1)
110. Azerbaijan (12)
111. French Guiana (2)
112. American Samoa (2)
113. Mauritius (7)
114. Iraq (1)
115. Bosnia and Herzegovina (3)
116. Vietnam (17)
117. Kazakhstan (14)
 There is one particular McDonald’s outlet, the only one in Cuba, which is located at the
Guantanamo Bay Naval Base. It’s accessible only to U.S. military personnel.

Conversely, some countries do not have a McDonald’s outlet, such as:

 North Korea
 Bolivia
 Ghana
 Macedonia
 Bermuda
 Zimbabwe
 Iceland
Unique architecture and locations worldwide

McDonald’s also has some stunning locations around the world, utilizing architecture native to
the region, old buildings and some very modern architectural marvels.

 In Bergen, Norway one outlet is housed in one of the town’s oldest traditional wooden
buildings. The interior though is similar to a typical McDonald’s outlet in the U.S.
 One outlet in Madrid, Spain is located inside a majestic building with marble walls and
grand staircase. The seating area downstairs has chandeliers and marble floors. It features kiosks
for digital ordering process. The outlet offers different pastries including macarons.
 You’ll find a gorgeous McDonald’s outlet on Rue Saint-Lazare in Paris. It also has
several ordering kiosks and mosaic floors
 At the Piazza de Spagna in Rome, McDonald’s is located at the bottom of the Spanish
Steps. Along the interior columns are ordering kiosks. It offers Tou Fondus de son fromage,
which is similar to a Quarter Pounder. It serves various pastries like macarons, cookies,
doughnuts and cakes. A gelato counter is also available, along with a salad bar. The architecture
blends well with the surroundings. The marvelous location includes mosaic walls, several
statues, fountains and marble and granite floors and walls. It can accommodate 800 visitors.
 The former Imperial Café in Porto, Portugal, which was built around the 1930s, is the
current location of a McDonald’s outlet. The beautiful and historic edifice features chandeliers,
high ceilings and stained glass in the Art Deco style.
 A decommissioned passenger plane is the home of a McDonald’s shop in Taupo, New
Zealand. An additional menu item is a classic food in the country called Georgie Pie, which has
three variants – Apple ‘N’ Blackberry, Chicken ‘N’ Vegetable and Steak Mince ‘N’ Cheese.
 In Batumi, Georgia, the McDonald’s outlet was designed by Giorgi Khmaladze. The
futuristic building has glass panels, a reflecting pool and an open-air patio.
 In the Negev Desert in Israel, you will still find a McDonald’s restaurant. The menu is
mostly Kosher, with an offering of 15 varieties of salad.
 Roswell in New Mexico is believed to be a crash site of a UFO. To pay homage to the
myth, the McDonald’s outlet in the area is shaped like a UFO. It is the only location where the
mascot, Ronald McDonald wears a space suit. The company commissioned Larry Welz, a local
artist to create a huge mural featuring the brand’s characters in space.
 The outlet in Dallas, Texas is shaped like a huge Happy Meal carrier bag.
Complementing it are equally large versions of a soda drink, French fries and hamburger. Its
chandeliers are made of Austrian crystals, while its booths are made of mahogany. Another
unique thing about this particular outlet is the wallpaper that was designed by Ralph Lauren.
Achieving global adaptation

A global brand like McDonald’s is able to achieve global adaptation successfully by hiring the
best people for the job. Thorough market research, detailed and objective analysis and planning
should go together to ensure complete knowledge of the market and consumers. There should be
potential demand, assessment of various issues, from cultural, economic, legal, work practices
and import guidelines.

Localization is vital for a global company to ensure that it adapts to the local market. Effective
communications is essential. Thus a global company should work with a professional translation
services provider, to ensure the accurate translation of documents, including advertising and
marketing slogans and menus. You do not want to be lost in translation, like some other global
companies that failed to thoroughly understand their target markets and their various
requirements

1.
Strengths ( identify whether its political, Weaknesses ( identify whether its political,
economic, social or technological) economic, social or technological)
e.g. Multiple locations (economic and
social)

Opportunities( identify whether its Threats ( identify whether its political,

political, economic, social or economic, social or technological)
technological)
2. Your analysis: