Import McDonald’s to Mongolia Term Paper

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Mongolian market proposes McDonald’s Inc. great opportunities for global expansion and penetration in the Asian region. Thus, similar to other less developed countries Mongolia is a country with high political and economic risks. High inflation rates and unstable economic position, low level of foreign direct investments, and international operations with other countries are the main limitations for McDonald’s. Marketing planning will require sales projections for such periods as one, three, five, and ten years ahead, but it will be extremely difficult to forecast and plan these activities. Mongolia is a parliamentary republic, but it becomes independent only in 1992 and has inadequate democratic institutions and unfavorable laws for international companies (Doyle and Stern 2006; Storey, 2001).

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Low income and unemployment rates, national culture, and cuisine will prevent McDonald’s from rapid growth. These projections predict customer and competitor reactions; attempt to gauge acceptance for new products; and highlight economic, social, demographic, technological, psychological, and political changes, all of which are difficult tasks to perform -nor can they be performed with the degree of precision available in other more concrete situations (Doyle and Stern 2006). The official language is spoken by 90% of citizens. The main problems will deal with religious diversity and national cuisine. Mongolians practice tendrils and shamanism, Buddhism, and Islam. Mongolians dietary patterns include mutton. McDonald’s will have to adapt its menus to this cultural and national tradition in order to compete in this country (Storey, 2001).

One of the major characteristics of the adoption of the marketing philosophy is that plans and programs replace haphazard marketing methods. By providing the means for anticipating the firm’s future requirements along with an orderly, continuous, systematic, and sequential basis, McDonald’s marketing planning should avoid crisis decisions and concentrates on integrated programs of action. There is more emotional resistance to change in the Mongolian type of culture and problem-solving procedures follow precedent or adapt old procedures to new situations. Departure from tradition is generally presumed to be bad until proved otherwise. The Mongolian world is a clear example of where modernization is not the same as Westernization. American themes are not, in general, good sales arguments among Mongolians — unlike among the Japanese, for instance. The value pattern in traditional societies also sets a limit to technology transfer possibilities. Mongolians are generally quite nationalistic. This is a common phenomenon among (successful) young nations. However, Mongolians also see themselves as unique and do not want to be compared with others (Doyle and Stern 2006).

Mongolians have little experience of working in formal organizations which, combined with belonging to a high-contextual culture, means that much of what goes on as planning, supervising, and controlling is more symbolic than substantive, as will be seen. Many Mongolian institutions and business organizations are not very efficient, which is one reason why Mongolian executives prefer to use personal (family and friendship) ties instead of formal channels and apply a very personalized and informal management style. Also, in the Mongolian type of culture, there is less concern with fashion in management ideas. The combination of education (whether at home or abroad) and exposure to the West (through business or personal travel) has typically resulted in a bilingual Mongolian executive. Incentive programs will help to attract and retain employees and potential customers (Hollensen, 2007).

McDonald’s will have to adopt a transformational leadership style in order to react and change traditional organizational patterns and performance principles. Management systems are culturally based. However, such systems are more than just rational tools; they contain elements of symbolism and rituals, and particularly so in high-contextual cultures, of course. The autocratic management style is often criticized by managers but it will help McDonald’s to control and introduce effective management practices and innovations. Meetings, where planning activities are to take place, can be used by seniors as confirmations of their positions and relations to other seniors and as a means to avoid uncertainty. As previously mentioned, this is particularly so when formal organizations are often inefficient in such recently modernized nations as those found in the Middle East.

These organizations tend, therefore, to become very ritualistic (Hollensen, 2007). Symbols are much developed in Mongolia, and Western managers visiting their clients and counterparts in the Middle East find themselves negotiating symbolic systems which define quite different realities from those existing in the West. This richness of symbols may seem like ‘an invisible wall’ to the outsider, because, like many aspects of culture and its manifestations, symbolic systems exist at an unconscious rather than a conscious level of awareness. However, these systems may be of importance at any time and at any place. Mongolians are very proud: they are proud of their culture, people, and achievements. They expect others to pay respect to what they are and what they have done. This tribal-based social structure is also very rigid in Mongolia. Friendship is determined by social relationships and mainly ‘locals’ (not ‘cosmopolitans’) will be found in influential positions. However, in order for this to work, the social structure must be very stable. One consequence is common, that is, privileges are unevenly distributed; Mongolians live in a collectivistic culture, but it is not egalitarian. It may even be that ordinary citizens are considered incompetent versus the authorities (Hollensen, 2007).

McDonald’s marketing planning should be a rational way of translating experience, research information, and thought into marketing action. It is a pragmatic, organized procedure for analyzing situations and meeting the future. Based on information about ends and means to determine various causal relationships, trends, and patterns of behavior, it is concerned with the selection of alternative strategies.

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References

Doyle, P., Stern, Ph. (2006). Marketing Management and Strategy. Financial Times/ Prentice Hall; 4 edition.

Hollensen, S. (2007). Global Marketing: A Decision-Oriented Approach. Financial Times/ Prentice Hall; 4 edition.

Storey, R. (2001). Mongolia (Lonely Planet Country Guide). Lonely Planet Publications; 3Rev Ed edition.

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