Kuwait is an Islamic region, which in the early years had few investors. This was because there was little knowledge of the marketing opportunities in the region. The religion and culture of the people living here influenced their perception of the services offered especially retail services. The discovery of oil attracted many foreign investors to Kuwait and this led to increased spread of wealth to those who were poor.
Many immigrants were from America, India, Bangladesh and other parts of Asia. The wealth from the extraction of oil accelerated growth in the middle and upper-middle classes. As a result of this, McDonald’s corporation – an American fast food company – was one of the 63 companies attracted to develop a branch in Kuwait. It specializes in selling cheeseburgers, hamburgers, French fries wraps and breakfast items.
McDonald’s corporation is considered to be a small store and it will be hard for it to succeed in the industry because it lacks incentives. On the other hand, McDonald’s is believed to ignore some cultures and behaviors of customers. McDonald’s corporation cannot expand their services into new markets because the Kuwait market is now saturated. For McDonald’s retail store to grow, it needs to first understand the importance of culture and religion to the residents of Kuwait (Blank 4).
This will improve human relations that will have a positive effect on the incomes of the retail stores. According to Raven and Welsh, McDonald’s fast food store should hire foreign workers from different countries who have experienced different needs and different ways of satisfying those needs.
This will be an opportunity for them to diversify in production of different types of foods. Foreign employees can easily be brought in from the head office in America. This will be an advantage to McDonald’s corporation because it will have to train its workers on how to prepare its products as well as how to use the equipments (Blank 5).
McDonald’s corporation should focus its attention on service encounters and satisfaction of their customers because customers are believed to receive less emphasis in the developing countries. Customer satisfaction is known to be specific to a transaction while service quality is affected by the attitude employees have towards service delivery.
The corporation should, therefore, invest its resources on improving the quality of services offered by its employees to their customers, for example, through training. This will help it to expand into other new markets leading to increased growth and profitability (Blank 5).
McDonald’s corporation should understand the culture of residents to help it in segmenting the market and resource allocation. Before entering into a market, it should have full information of the different cultures that exist in that market so as to operate profitably. National culture is considered as the main factor that influences international management as it will determine the decisions made by management concerning its operations (Blank 5).
McDonald’s corporation should prepare its food in large quantities in order to take advantage of economies of scale, which will lead to reduced costs and increased profits. The extra profits gained through savings from producing in large quantities will help expand to other areas. It should also invest in proper technologies and train employees on this modern technology (Blank 7). This will make the operations efficient and effective thereby reduced costs.
McDonald’s corporation as one of the fast food companies is considered a low wage industry. It, therefore, cannot afford to pay the minimum wages. This leads to high turnover. It should, thus, take advantage of the sub minimum wage for the youths. Sub minimum wage reduces training costs because it does not require any additional training for the first consecutive ninety days. The working conditions of the employees should be improved and their health standards maintained in order to motivate them to work harder (Blank 7). The company should seek real expertise in brand development.
Finally, the top management at the organization should be well trained to make appropriate decisions that will make the operations of the store more effective. They should be able to research on information about the market and take advantage of the information to enter new markets. They should also possess interpersonal skills to help them relate with employees in a proper manner. This will motivate employees to put more effort in their work. Employees should also be allowed to make some decisions that affect them. The firm should adopt new business models, which will help in averting its smooth operation (Blank 9).
For McDonald’s corporation in Kuwait to grow internally and externally, it should first understand the culture and religion of the residents who are the target customers. It should apply sub minimum wage to reduce employee turnover because it cannot manage to pay the minimum wage. It should also segment the market so as to serve the customers better. This can be done through obtaining relevant information about the market. Lastly, it should make sure it takes advantage of economies of scale and also provide good working conditions for employees.
Works Cited
Blank, Steve. “Why the Lean Start-Up Changes Everything.” Harvard Business Review, 2013. Web.