The essence of globalization, as well as the negative impact of globalization of cost, market, environment, and competition, has been the main attention gaining area in this report. Cost reduction, market identification strategies, harmony maintenance with the environment and better FDI investment could be done due to globalization. In addition to currency fluctuations, economic instability, resource exploitation, and reduction in the standard of living as seen due to globalization have also been focused. Different globalization strategies taken by the company Mc Donald’s has made this report more practical and realistic. A practical implication of globalization as well as challenges faced in terms of supply chain management, diversification, and international trade laws implementation focused in terms of a company Mc Donald UK has made this report more effective for planning long-run success strategies.
Effective synchronization of external and internal factors of the country gives opportunities and chances to go global. The business environment comprises of the internal and external environment which when managed well could lead to success in that organization. Better quality and focus on customer problems could not give satisfaction but also could enlarge the base of the business by making it spread in different countries. Mc Donald's, the leading fast-food company provides healthier, nutritious and best quality committed fast foods that steal the heart of the huge number of customers. The cost factors, environment, market and competitive factors that are affecting the global commerce and trade have formed the main area of focus in this assignment. Comprehensive coverage of opportunities and challenges faced by McDonald's in gaining a higher competitive and global position in the international market has made this assignment more engaging and power pact.
Mc Donald's leading fast-food company operates in early in 100 countries and has 37855 outlets in those countries. Best known for the hamburgers, French fries, wraps, and milkshakes the company has always remained in the top position in the market (mcdonalds.com, 2019). The population of the company due to certain scandals has not reduced till no and it has gained topmost raking in terms of competitive advantage. The main activity of the business is to provide great tasting food to the customers and that also at their comfort zone, the flexibility of getting food at home and cash back facilities has helped the company in reaching the office as well as homes of the customers.
The popularity ranking of the company Mc Donald's in UK is higher and the above graph is the reflection of that only. From the above-stated graph, it can be said that nearly 57% of the customers residing in UK like the services of the company and visits the food zone frequently. Whereas customers preferences for other fast food companies is much lower as compared to Mc Donald’s and this is because the company always try to innovate their products so that more customers could be targeted easily. Furthermore revenue to $21025 Million worldwide has reflected the popularity of the company in the globalised arena. Among the other countries, in UK, France and Germany the sales rate has been 21%, which reflects the wider acceptance of the company among the customers residing worldwide (macrotrends.net, 2018). Spicy Chicken and Double burgher facilities provided by the company has attracted the foodie customers more towards the company and has made this company top ranker among the fast food chains in UK.
In addition to that market slice of 15.2% owned by the company itself says its popularity among the customers and 34% of the customers believe that best hamburgers and French fries can be received from Mc Donald’s only.
Being the King of vertical integration keeping the cost down and rising the profit has helped the company in handling the supply chain easily. The complexity to handle the supply chain globally has become easier due to this vertical integration (franchisedirect.com, 2017). Although the suppliers may sometimes impede the company by giving a false price list and by doing late supply but still supply chain gets managed well by the company. Good control over the suppliers has made this a corporate giant and successful global company in the fast-food industry. Creation of wealth that lasts long term and cost mitigation strategies for gaining higher competitive advantage has made this the unique and popular one among the consumers. Furthermore stronger resiliency and consistency in operations along with innovation stemming have helped in staying successful for a longer period. Overcoming environment and weather challenges has raised the commitment of the company by 80% and this has also been set as an example for globalized business by effective handling of the fast-food market (boxaroundtheworld.com, 2019).
Globalization stands for much closer and longer integration with the world economy that assures both profit and risk in the organization. Different factors that are driving this globalization include market, competition, cost and market (Deresky, 2017). Different types of innovative strategies in product costing, market efficiency development, efficient business environment development ensures that higher competitive advantage has been gained by the organization. Elaborative discussions of different factors that are augmenting the globalization process of the business are as follows:
It is generally seen that values provided to the end-users and cost of goods usually determines the value addition and goods movement in the organization (Peng, 2016). The company Mc Donald's has always looked for the comfort and satisfaction of their customers. Therefore, value addition in the respect of quality and service improvement has been given top priority. It is seen that innovative new technologies like the sky- thru and drive-thru facilities have helped the waiters in taking the orders online (wirelessdrivethruheadsets.com, 2019). This extra feature that is added with the product delivery modes has acted as the catalyst for globalization. Spreading the domain for sales by introducing new modules for order taking has been the main value-added for the company. Discounts and seasonal offs along couple discounts has effectively contributed towards globalization. The cost factor and generally lower price higher value theme has helped Mc Donald's in reaching the zenith for long term success in the market. Lower prices with more channels for food delivery has acted as a boon for the company and the procedure to add value for remaining unique in the peer has helped in spreading the operation on a global scale.
One of the most important global drivers is market that and these factors have been well utilized by the company. Availability of the products among the consumers as and when needed and preplanning of the market forces by analyzing the market strategies denotes the core element of market factors that generally drives globalization in the business. Keeping the market in the palm by knowing every single minute details of market existing in different countries could help in the globalization process (Cheng, Johansen & Hu, 2015). This market driver helps in keeping essential knowledge about the market that is essential in attaining globalization. International marketing campaigns, brand promotions and customers desires that always changing therefore by the help of this market factor the changing dimensions of the world could be determined easily. In this respect also the company has separated a department that is looking after the market for fast food not only in the country of UK but also in other countries. Clear knowledge about the innovative strategies seen in the market and development of new brand promotion technique by keeping pace with the market has helped the company in utilizing the market driver for globalization (Disyatat & Rungcharoenkitkul, 2016).