Question

• Assume a Big Mac is $3 in the U.S. How much would the Big Mac cost in China?
  
• Conduct some research. Identify at least one difference between the typical menu offering in the U.S. and the menu offering in China. Be sure to provide a citation.
  
• Conduct some research. Identify a major fast-food competitor that McDonalds faces in China. Be sure to provide a citation.
  
• Conduct some research. Locate a video commercial for McDonalds in China. Identify at least one difference (besides the language) between McDonalds’ commercials in the U.S. and the Chinese commercial. Provide the full URL for the video.
  
• Which aspect(s) of the business environment (economic, technological, sociocultural, demographic, political/legal or international) are most affecting McDonald's success in China? Provide specific examples.

Answer 1

(1)

At the time of the article, “McDonalds to Double China Restaurants by 2013,” 1 Yuan is 8 to 15 cents. So, a Big Mac at the time of the article would cost 20 to 37.5 Yuan. However, at the current time, according to The Money converter website, a Big Mac, costing $3, would be 19.10 Yuan Renminbi.

(2)

Doing some research, I have found that there are many different culinary choices on the Chinese McDonald’s menu that many Americans might find strange. A tradition for many Chinese people is afternoon tea. To accommodate this, McDonalds offers their version of tea, the McBrew. Where American McDonalds offer apple slices to try to make people think that there is actually healthy food at the fast food chain, Chinese McDonalds offer a cup of corn. They also offer a few pork dishes, such as the Ham N’ Cheese Burger and the Double Pork Burger. One item that is heavily Chinese-influenced is the taro pie, which basically substitutes the American apple pie. Taro is a root vegetable that is often used in Asian cuisine. And probably the most popular items on the Chinese McDonald’s menu that is different from the American menu is chicken. Not just chicken sandwiches, but also chicken legs, wings, and thighs. While viewing Chinese commercials for the following question, the people were enjoying chicken in the majority of the commercials. Apparently, Chinese people love their chicken.

(3)

According to the article, McDonalds to Double China Restaurants by 2013, Yum Brands Inc already had roughly 3,700 locations in China in 2010 (the time of the article), while McDonalds only had 1,000. I would definitely say that they are McDonald’s biggest competition. Even more specifically, I would say the Yum Brands Inc’s fast food chain KFC is the big man on campus in China. The main attribution to KFC’s success in China is its use of local ingredients. “In the 24 years it has been operating in China, Yum has hired Chinese managers to build partnerships with local companies in its expansion drive and used their expertise to offer an array of regional dishes that appeal to domestic tastes…. Today, KFC customers can purchase a bowl of congee, a rice porridge that can feature pork, pickles, mushrooms and preserved egg, as well as buy a bucket of its famous fried chicken. Also, as stated in the previous question answer, Chinese people love their chicken. McDonalds is a hamburger-based fast food chain, whereas KFC is a chicken-based fast food chain. So frankly, McDonalds cannot make chicken Like KFC does, unless they find a way to steal the Colonel’s 11 secret herbs and spices. McDonald’s is still expanding, but as of now, KFC is the fast food king in China.

(4)

The Chinese McDonald’s commercials are similar to McDonald’s commercials in the US. Many of them display people at McDonalds enjoying themselves being overjoyed to be at McDonalds; trying to send out the message that eating at McDonalds makes people happy. However, they are different in some ways as well. The one I chose to write about is about McDonald’s new Chinese Super Value Meals. One difference in the Chinese commercial is that instead of being called the Dollar Menu as it is in America, it is called the Tickling Heart Value Menu. The items are advertised for only costing only 6 Yuan, which is around 1 US Dollar.

One more thing which makes this commercial different from American McDonald’s commercials are the way in which the characters act. In the commercial the Chinese man tells the Chinese woman in the commercial, “guess what I’m going to treat you to?” and then shows the woman the new Super Value Meal items in order to win her affection and earn kisses. This is something you may not find in a US commercial because, even though it is just meant to be cute and funny, some overzealous parents may think this as inappropriate. Then the man shows the woman the items, he holds it up high, right to the camera, as it goes to a brief freeze frame to keep display of the item, while he has a cheesy smile on in the background. It is very similar to stereotypical Asian commercials that you may see in a movie or TV show. This type of quaint humor may not be used in US commercials because Americans may see it as just foolish rather than being appealing to make them want to go to McDonalds.

Another difference in the commercial, were the food items. The man was not holding out double cheeseburgers. He was advertising spicy fried chicken legs and banana pies. As far as I know, McDonalds certainly does not serve fried chicken and banana pies in their US locations.

(5)

The aspect of the business environment being affected the most in this article is the economy. According to the article, McDonalds to Double China Restaurants by 2013,”China is the fastest growing major economy. As the country with the world’s largest population, more and more foreign companies are making their way to China. McDonalds is the world’s largest fast food chain in the world and China is the fastest-growing market for McDonald’s worldwide with regard to new restaurant opening.

McDonald’s increasing popularity and expansion in China can only help China’s already booming economy even further. As the more restaurants open, the higher up consumer spending goes, the more job opportunities open up, and the more China’s GDP increases. McDonalds expects to expand its number of restaurants in China up to 2000 by 2013.

I do not see any aspects discussed in this article causing any political or legal aspects of the environment because I don’t see it how more McDonalds opening up in China would have an effect on any laws or regulations. McDonalds has been around for a long time and I am pretty sure they know how to abide by all the rules by now.

I also do not feel that any aspects discussed in this article would affect China’s technological environment. It did mention that McDonalds was renovating their locations in China with new interiors and other upgrades. This may improve the technology within each location but would not affect China’s technological state. Maybe McDonalds affects technology by serving cheap quick food to all the busy scientists and inventors in China to give them the fuel to keep on working on those brand new technological innovations.

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