The Golden Arches: International Franchising Essay

2427 words - 10 pages

ABSTRACT: International franchising plays an important role in McDonald's expansion strategy, as well as the company's financial performance. About 70 per cent of McDonald's restaurants worldwide are owned and operated by independent businessmen and women (McDonald's, 2001). This paper is going to focus on international franchising including the benefits and challenges in practising it. For illustration of a success case is McDonald's strategy in using international franchise operations to expand its business worldwide. The final part of the paper will include forecast and suggestion whether the company is going to continue implementing the current strategy to globalise further.Nowadays, it is not difficult to try to find a McDonald's restaurant whether in your home country or whether you are going on a trip to other country. "The Golden Arches" have become a distinct character of international business and popular culture. The sign and the special prefix "Mc" have been recognised and imitated everywhere over the world. As it is stated in the company's website, their vision is to be the world's best quick service restaurant experience, by providing outstanding quality, service, cleanliness and value to make every customer in every restaurant smile.As globalisation is driving business environment today, multinational corporations have to generate a global strategy that can be used to assist them in achieving their missions and objectives. McDonald's Corporation began expanding internationally in 1967 with the opening of restaurants in Canada and Puerto Rico. Today, the company operates more than 20,000 restaurants in 100 countries on six continents. "The Golden Arches" has been relying on international franchising as the mode of entry strategy to penetrate the global market. About 70 per cent of McDonald's restaurants worldwide are owned and operated by independent businessmen and women. McDonald's has found that its overseas operational is producing more revenue than domestic operation. In United States, where the market is very competitive, the sales figure has increased by 3 per cents in year 2000. Similarly, the overseas market such as in Europe, Asia/Pacific and Latin America has shown a 9 per cent increase in sales revenue last year (McDonald's, 2001).What is Franchising? Franchising is a common, low-risk way of distributing products and services globally in fast food and hotel/motel industry. It is an arrangement where one party (the franchisor) allows the other party (the franchisee) to operate the business and to utilise its product line, logo, trademark, management and operation methods, in return for a fee (Hogget & Luthans, 2000). At this point, the franchisor will have more control and provides support such as advertising, training and quality assurance program for the franchisee. Horovitz and Kumar (1998) have suggested that franchising is the appropriate market entry strategy in countries that are culturally distant to the home...

Find Another Essay On The Golden Arches: International Franchising

Franchising to expand a business Essay

2528 words - 10 pages name to market and sell products/services. Thus it is a marketing concept of delivering products and services that can be applied across a diverse range of businesses. The International Franchising Association has developed 75 different categories describing the businesses of its members.1.2. Who is involved?Franchising involves two parties:Franchisor - The franchisor is the initial owner of a business system which has been developed and proven to

Globalization: MaDonal Essay

1036 words - 5 pages in United Kingdom was £2.29. When the purchasing power party was utilized: $3.57/£2.29 = 1.56, this compares to the actual exchange as $2.00 to £1 was the exchange rate. This demonstrates that the Big Mac Index is sufficient and is working in order to compare the exchange rates between two countries. The Golden Arches Theory of Conflict Prevention was introduced by an American author Thomas L. Friedman. It is a proposition that suggest that no

How did the Christian Church Change during the Middle Ages?

1764 words - 8 pages designs that Gothic cathedrals boast. However, multiple iconic or original elements are found in Gothic cathedrals, including flying buttresses, large windows depicting Christian art, and curved arches. The cathedrals are also typically very vertical, with the Amiens Cathedral in France, example, extending to over 138 feet. Reaching deeper into the structure of these cathedrals, there is something that cannot be unnoticed as a Gothic cathedral

McDonlad's

1226 words - 5 pages . However the workers only get minimum wage if they are lucky. Most McDonald's employees only get ten dollars. This is under the limit by at least 25 cents. The employees don't seem to mind, since one million new workers are hired here in the United States every year. (McDonald’s web March 5 2014) McDonald's is widely known company. More people recognize the Golden Arches than the Cross. The arch was presented publicly around the year 1962. The

COMPENSATION AND BENEFIT OF DOMINOS - COLLEGE FRESHMEN - RESEARCH

1702 words - 7 pages development. The system and sources of compensation and benefit in Domino's Pizza The compensation and benefit systems of Domino's Pizza in the United States are tightly connected with its methods of international expansion. The most important parts of the system are licensing and franchising: "We have developed a large, global, diversified, and committed franchise network that is a critical component of our system-wide success and our leading position

Financial Analysis Of McDonalds

2148 words - 9 pages Most anyone driving with a young child in their car is familiar with McDonalds. Once that child sees those trademark golden arches out the car window, you will likely be stopping in for a happy meal with a toy inside. But does this mean that the company is a good investment for your hard earned money? That is what we will explore in this paper. We will look into the stock and financial statements of McDonalds and their closest competitors to do

Golden Gate Bridge Research Paper - ENGLISH - Research Paper

1683 words - 7 pages . The suspended cable is described mathematically as a catenary, it’s similar to a parabola, and it’s an ideal structural form. The Gaudí from the last century in Barcelona used such arches and vault forms. After 1955 the principle of cables in tension was used extensively for the building more than the bridges. (Roth 45) The Golden Gate Bridge, that is believed to be the most photographed bridge in the world, is now known as one of the seven civil

Evolution of Logos

1037 words - 5 pages , “Starbucks – Coffee – Tea – Spices.”, because without it nobody would know what it is this business is trying to sell. As time went on, he decided it was time for a new logo, a simplified mermaid with Starbuck – Coffee bannered around it. Today, they no longer have Starbucks on their logo. It is not necessary because that mermaid is so recognizable. Another company whose logo is internationally recognized is the one with the two golden arches

The History of Fast Food in America

1466 words - 6 pages ;    Eventhough business was going great, the brothers decided that they needed a new architecual plan for their restaurant. Richard decided that it would be a great ides to have arches go from the ground right through the roof of the restaurant. This was the birth of the “Golden Arches”. These arches were to go therought the roof and slope towards the front of the resterant. Another great idea that the McDonalds borthers had

The Roman Empire was Powerful

1010 words - 5 pages power which is paramount in their culture. Some examples of their design includes arches, pillars and vaults. High arches was the most prominent throughout Rome and became the most useful for public places including, public baths and basilicas, churches, sewers, and amphitheaters (Links). They also utilized vaults in their architectural designs for a variety of reasons. The three main types of vaults that Romans used includes the barrel, the

daloon econoic analysis and swot analysis

714 words - 3 pages firm but mr Wong is going to open a small college caffe. With its few assets and some years of international experience. Hence, this two factor has made Mr Wong entry modes more on the intermediate and hierarcharic entry modes. and it belongs to a soft industry, the best way to enter foreign market is licensing or contract manufacturing In general, companies decide to begin franchising for one of three reasons: lack of money, people or time.MR Wong

Similar Essays

International Marketing Carlsberg Plan To Use The World Cup To Test Market Of New Product "Golden Goal Beer" At 6 Countries

5422 words - 22 pages appeals to a broad diversity of tastes, personalities and lifestyles and ensures growth in all segments of the beer market. The portfolio is constantly strengthened through a clear branding strategy; with the Carlsberg brand as the leading international premium beer, supported by regional brands such as Tuborg and national brands like Tetley's, Baltika and Ringnes.MissionCarlsberg is a dynamic, international provider of beer and beverage brands

The Global Arches Business Essay

1522 words - 6 pages The Global Arches business is a large global corporation that started off in America. Even with this large corporation starting in the U.S., it has branched out and is now a big part in the fast food industry around the world. When outsiders look at the American life, they see a very fast pace, overweight, and look for the easy way out and inexpensive ways. These are largely what the Golden Arches Corporation is all about. Many people see the

Mc Donalds, What Does It Mean To You?

574 words - 2 pages Marketing Management 3-4:30 Current Issues Paper McDonald’s, What Does It Mean to You?      McDonald’s Corporation has held a prominent position in the fast-food market for much of its existence. A person would be hard pressed to find consumers who would not readily recognize the famous golden arches, as the company has expanded its market globally. However, as global consumer tastes shift to a more heath-conscious

Mc Donald's Food Pvt Essay

2283 words - 9 pages , meatloaf, sirloin, sandwiches, soups and salads.Pret A Manger is a quick-service food concept that serves mainly prepared and packaged cold sandwiches, soups, salads, coffees and teas mainly during breakfast and lunch.McDonald's, The Golden Arches Logo, Ronald McDonald and Big Mac are some of the trademarks owned by the Company. Of the more than 30,000 McDonald's restaurants in over 100 countries, over 8,000 are operated by the Company, more