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Mcd’s business structure which is based on geographic structure of a region has a major impact on its strategies

April 10, 2019 0 Comment

Mcd’s business structure which is based on geographic structure of a region has a major impact on its strategies.
Mcd has divided its functioning into 5 geographical divisions. United States and Europe are the highest revenue generators for MCD, at 65%, 75%. Most important strategic approach Mcd’s implement is to keep maintaining the major markets and simultaneously expanding the business into other emerging markets.
Different customers in different regions have different tastes and demands, so to fulfill the requirements Mcd have set up local geographic units in different regions to adjust the products and services as per the taste of the customer, the units are solely responsible for producing, branding and marketing in that region. By these geographical units Mcd is able to have a maximum hold of a specific region as well as is able to satisfy the needs of the local consumers and promotes ‘Maximum local development’. Customers in different nations have different preferences for the food items hence Mcd keeps on launching different items in their menu for their local customers. China & India are very good examples of this.
Mcd’s key to success is the “Think Global and act Local” business strategy which helped it achieve competitive advantagein its fast growing fast food industry. Mcd has customized its strategies considering economical, geographical, environmental and socio-cultural factors.
There are different modes of entry chosen by companies depending upon the degree of resource commitment and the risks involved in the mode in a particular region.
Franchise is a less risky and cheaper mode of entry while is a best option for Mcd’s as they had to adapt as per the local community preferences so they wanted local business people to handle the business. 80% of the Mcd restaurants are franchised and has led to many years of growth, profit and risk reduction. Mcd’s franchising opened up a job market for the local people and provided several growth opportunities to them.
Regional franchise holders were capable of building up a brand image for the company and made it successful in the long run.
The ‘trans-national’ strategy of Mcd’s overseas provides a high degree of local responsiveness.
Mcd’s strategy to serve veg burgers in India instead of non-veg burgers (pork and beef) to its Indian customers can be termed as polycentric.

Mcd follows the ethnocentric orientation model. This requires the american mgt culture in all world’s areas inside and outside the company (HRM,production method,training,motivation) Mcd has created its own world center for training.
The Hamburger Uni headquartered in Oak Brook(USA). It offers training programs exclusively for Mcd employees. These staff coming from over 119 countires, represents the McFamily.
The training program of the HUni aims to develop the mcd staff at all levels of the org. It also aims to train people for a long career at Mcd,as the policy is based on long-term career’s concept and strong possibilities of change and development within the group. It promises simple teammate to move up the ranks quickly. This is a crucial point for Mcd’s HR communication. In Europe and in spite of Cultural diversity, this model demonstrates large success.

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