Analyze an article; doing business in a foreign country; political, technological, cultural
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Search the Cybrary or other online resource and find an article describing an experience of either: (1) a US company or division that conducts business in a foreign country; or (2) a company or division based in another country which has started doing business in the United States. Perform searches on "joint venture," "licensing," or "strategic alliance." Based on your research, submit a document to the managers of the organization which answers the following set of questions:
Was the company's experience positive, negative, or mixed? Justify your answer.
What legal or political barriers did the company have to overcome? What technological obstacles did the company encounter? What cultural or business differences did the company encounter? What problems did these differences create for the company? What did the company do to overcome the obstacles? Did the company handle cultural and business differences effectively? Why or why not?
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Solution Summary
In a 1413 word response, the subject of McDonald's and KFC's experiences in foreign operations is fully explored.
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THE COMPANY IS MCDONALD'S, AN AMERICAN COMPANY THAT DOES BUSINESS ABROAD
"Billions served," indeed. McDonald's is the world's #1 fast food company by sales, with more than 30,000 of its flagship restaurants serving burgers and fries in more than 100 countries. Almost 30% of its locations are company-owned; the others are run by franchisees. While most of the company's eateries are free-standing units, it does have some quick-service kiosk units located in airports and retail areas. Each unit gets its food and packaging from approved suppliers and uses standardized procedures to ensure that a Big Mac purchased in Pittsburgh tastes the same as one bought in Beijing. McDonald's also owns the Boston Market and Chipotle Mexican Grill fast-casual chains.
Shifting its focus from opening new restaurants to building sales in existing ones, the number of restaurants opened in 2004 was reduced to 430 traditional and 198 satellite (limited-menu) restaurants. That year the Chinese government authorized McDonald's to begin franchising in its nation.
MCDONALD'S IS DOING BUSINESS IN CHINA, YOU MAY CALL FRANCHISING A FORM OF LICENSING
McDonald's Inc. announced yesterday that it plans to begin franchising operations in China, hoping to develop about 10 franchises in the country by the middle of 2006, the Shanghai Daily reported.
"Franchised stores will play a big role in the next five to eight years," James Kramer, vice president of international franchising, was quoted as saying in the newspaper.
The US-based restaurant chain currently operates 600 restaurants in China and hopes to add 100 restaurants annually starting next year, he said.
Opening a McDonald's franchise will require at least 2.5 to 3.2 mln yuan and strong restaurant management experience, the newspaper reported.
Meanwhile, TNT, a Netherlands-based express delivery and logistics company, said it will also begin franchising operations in China.
The newspaper reported that it will open its first franchise as early as next spring, allowing local companies to join its logistics network and offer services using the TNT logo.
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