McDonalds is an American fast food corporation that services various countries around the world. According to market survey conducted in 2013, this corporate entity supports operations in more than 119 countries and regions (Love, 2013). Since inception in 1940 as a restaurant, McDonalds sustains tremendous growth and expansion into diverse market segments.
Its national and international operations anchor astute corporate ideals that define overall response to cues and triggers that characterize hospitality in contemporary society (Love, 2013). Initially, Richard and Maurice McDonald sought to provide culinary solutions to residents of Des Plaines, Illinois.
However, the enterprise expanded into other regions due to proper planning and corporate strategies that sufficed through its vision and mission. Franchising is McDonalds’ market entry strategy (Love, 2013). A market entry strategy offers opportunity for corporations to venture into new markets. It supports distribution channels and paradigms that ultimately create impetus for survival and profitability with regard to such target markets.
A market entry strategy also facilitates adherence to contracting and regulatory thresholds that suffice in new market thresholds (Love, 2013). Franchising is the ideal market entry strategy for McDonalds because it precipitates numerous advantages that bolster its stature as a global leader in food and hospitality industry (Keillor, 2011).
McDonalds has an appropriate business model that suits franchising as a market entry strategy. The corporation has demonstrable vigour with regard to its approach and venture into target markets (Keillor, 2011). Its popularity in the local market bolsters its viability as a franchise in uncharted market territories. Franchising guarantees growth and expansion into new markets devoid of statutory and regulatory hiccups that characterize such ventures (Keillor, 2011).
Numerous strategies suffice with regard to entry into new markets and establishment of international networks. Corporations should settle for market entry strategies that ameliorate operations and guarantee sustenance of ideals that define presence in the market (Keillor, 2011).
Most entry strategies require prior planning because they present risks and challenges that could jeopardize operations within new and existing market thresholds (Keillor, 2011). Although McDonalds applies franchising as its sole market entry strategy, other strategies could suffice in its case. For instance, acquisitions and mergers could support its business model in foreign markets (Keillor, 2011). In this case, businesses buy into existing enterprises within the target market.
This strategy is favourable for McDonalds because it offers stable customer base and networks that facilitate access to suppliers and other stakeholders in the market (Keillor, 2013). It also circumvents legal and regulatory challenges that often hinder establishment of new enterprises within foreign markets. However, this market entry strategy presents risks that could hinder initiation and propagation of operations in target market segments (Keillor, 2013).
Whenever corporations seek to venture into new markets, they should consider geopolitical factors that could hinder operations. Such factors cripple business operations due to various unforeseen circumstances and realities (Keillor, 2013). For instance, political hostility between country of origin and target country affects perception and overall reception into the market. It is important to acknowledge the role played by such factors in facilitating commerce and industry (Keillor, 2013).
McDonalds should focus on due diligence to establish various prevailing conditions that characterize operations with regard to target markets. Such undertakings create impetus for action and reaction to forces that manifest in diverse market thresholds. In absence of such efforts, it would be difficult for corporations to hone progress and sustainability in new markets (Keillor, 2013).
References
Keillor, B. (2011). Winning in the Global Market: A Practical Guide to International Business Success. London: ABC-CLIO.
Keillor, B. (2013). Understanding the Global Market: Navigating the International Business Environment. London: ABC-CLIO.
Love, J. (2013). McDonalds: Behind the Arches. Newyork: Paw Prints.