Question

With cost and adaptation pressures and their Implications for International Strategies in mind, discuss the approach Mcdonald might take when entering a North American market versus Middle Eastern market.

With cost and adaptation pressures and their Implications for International Strategies in mind, discuss the approach Mcdonald might take when entering a North American market versus Middle Eastern market.

Answer 1

McDonald's primary strategy for entering an international market is cost leadership. This involves minimizing costs to provide variety of products at low prices. McDonald offer products that are nearly cheaper than its competitors.

While entering into North American market McDonald needs to focus on cost and quality of the product. McDonald opens new restaurants in North America by franchising, joint ventures or corporate ownership. McDonald's strategy to open restaurants in new locations becomes successful because of low costs and low prices. It's restaurants in Middle Eastern countries also need a generic strategy of cost leadership and good quality. In 1993, McDonald opened a new restaurant in the Middle East region, i.e., Israel. After it's successful entry in Israel, it moved to Saudi Arabia,Oman, Kuwait, Egypt, Bahrain, and Qatar. In these countries McDonald followed the same cost leadership and quality technique to attract more number of customers. Lowering price and maintaining quality are the two weapons of McDonald that it uses to sustain in the international market. In order to cut costs it can employ local people for its product development and delivery work.