Multi-National Operation and Competition Study of McDonald's Corporation - Research Paper Example

Multi-national operation and competition study of McDonalds Corporation Number: Module BUS4002 Hand-in Supervisor’sName: Table of Contents Table of Contents 2 1.0 Introduction 4 1.1 Rational 4 1.1.1 Why the company is interesting? 4 1.2 The Aim of doing this Report: Operating and Competing situation of McDonalds Corporation 4 1.3 How to do: Theoretical Approach 5 2.0 Strategic Analysis: Competitive Position of McDonald’s Corporation 5 2.1 Porter’s Five Forces 5 2.2 PEST 8 2.3 Porter’s Generic Strategy 9 3.0 Cross-Culture Management 10 3.1 Hofstedes Five Dimensions 10 3.2 Trompenaars Seven Dimensions Model 12 Nutrition and Well Being 15 Employee Benefits 18 5.0 Conclusion 18 1.0 Introduction In order to write this research paper, the researcher has selected McDonalds Corporation as sample organization. The following section will brief rationales that have been influenced the researcher to select McDonalds Corporation as core focus in the paper. McDonalds Corporation is the largest and iconic fast food chain across the world and the company operates in more than 115 countries while serving almost 70 million customers daily (Hu and Xie, 2013). The company is headquartered at Oak Brook, Illinois, U.S and it was established by Richard and Maurice McDonald in 1955 (McDonalds, 2014a). At present, McDonalds Corporation offers full range of food items including burgers & sandwiches, chicken & fish items, breakfast items, desserts & shakes, slides & snacks, beverages, smoothie etc (McDonalds, 2014b).. Total employee base of the company is 840,000 while in the last financial year, the company earned revenue worth of 27.56 billion US dollars from its global operation (Hu and Xie, 2013). 1.1 Rational 1.1.1 Why the company is interesting? Consideration of seminal research work published by Zwolak (2010) reveals the fact that McDonald’s Corporation is largest selling fast food brand across the globe. Zwolak (2010) even reported that Big Mac’s business strategy or internationalization strategy always allowed the much needed space & flexibility to adjust with macro environmental uncertainties. Resource dynamics and ability of the company to retain competitive position in sustainable manner have made the company interesting subject to study for different scholars. Similarly, such unique features and strategic flexibilities of McDonalds Corporation have also influenced the researcher to use the company as sample organization in the paper. 1.2 The Aim of doing this Report: Operating and Competing situation of McDonalds Corporation McDonalds Corporation has base operation in USA and for sake of simplicity; the study will analyze the current trend in fast food industry by taking USA as reference point. Zwolak (2010) pointed out that the fast-food industry is defined by characteristics like, 1- patrons pay before eating, 2- customers may eat the food in the restaurants or ask for delivery or take out the food from counter while driving, 3- gross sales revenue are earned from both company-owned stores and franchises but for net revenue, sales revenue from company owned stores is only being taken into account. McDonald’s Corporation is not only facing competition from competitors but also facing industry specific and macro environmental challenges that may negatively affect business growth of the company. Challenges for McDonald’s Corporation can be summarized as, challenge 1- retain market leadership position in domestic market leadership and compete with existing players or new entrants in terms product offering, cross segment entry, marketing mix, customer retention etc, challenge 2- attract health conscious customers and diversify product portfolio in order to attract more customers and challenge 3- control value chain cost and control the financial volatility in revenue earning in order to stay afloat while industry growth rate is getting stagnated and challenge 4- follow code of ethics in order to empower staff at moral level and incorporate CSR activities in comprehensive manner. In such context, there will three research objectives such as, objective 1- doing comparative analysis of the company’s competitive position in its various markets, objective 2- understanding company’s position in relation to cross-cultural issues and objective 3- analyzing company’s position in relation to corporate social responsibility. 1.3 How to do: Theoretical Approach Porter (1980, 1981 and 1983) used “activity-based view” in order to define “generic strategies” for companies. In order to analyse strategy dimension and competitive position of McDonald’s Corporation, the researcher will use theoretical concepts like PEST, Porter Five Forces and Porter Generic strategies. Hofstede’s (1984 and 2001) five cultural dimensions and Hampden-Turner (1997) seven dimension model will be used for analyzing cross cultural management of the company. On the other hand, CSR theories will be used to understand CSR activities of the company. 2.0 Strategic Analysis: Competitive Position of McDonald’s Corporation 2.1 Porter’s Five Forces Bargaining Power of Buyers With the breakout of economic recession and decrease in annual disposable income, competitiveness of the market is started getting defined by increasing price sensitiveness of customers (Ibrahim, 2012; Porter, 1998). Bargaining Power of Buyers of McDonalds Corporation is low due to reasons like, 1- fast food companies like McDonald’s target large segment of population and due to low switching cost and margin, sales revenue of the company is not dependent on particular ethnic groups (Hu and Xie, 2013), 2- product choice availability of customers of McDonald’s has increased with food menus ‘Happy Meals’, ‘take-away coffee’ etc (Zwolak, 2010). Bargaining Power of Supplier Presence of many undifferentiated and small level suppliers has increased choice availability of McDonalds Corporation and subsequently reduced bargaining power of individual supplier (Porter, 1985, 1991 and 2008). Large players like McDonalds Corporation purchase raw material from supplier at bulk amount and therefore, they get the power to push supplier to provide volume discount. However, when it comes to soft drinks supply, Coca-Cola has signed supply contract with McDonald’s while Pepsi is the soft drink supplier for KFC (Hu and Xie, 2013). Even soft drink suppliers co-brand their supply within restaurants of McDonalds Corporation. For these reasons, bargaining power of supplier for the company has been assessed as moderately low in the industry (Zwolak, 2010). . Threat of New Entrants The market is dominated by presence of global fast food companies and Quick Service Restaurants (QSR) like Pizza Hut, McDonald’s, KFC, Domino’s and Burger King. Global players like McDonalds Corporation have established strong brand equity and presence due to their long presence, marketing excellence and service quality (McDonald’s Corporation, 2010). In such context, it will be difficult for new players to compete with McDonalds Corporation and also exceed the service expectation of customers. If new entrant lacks the economies of scale then it will be very expensive for these companies to establish and expand franchise network, incorporate marketing activities to promote the brand (Hu and Xie, 2013). However, new entrants and competitors of McDonalds Corporation can cut down marketing advertisement cost by adopting social media marketing techniques while distribution cost can be lowered by transferring the cost to franchisors (Ibrahim, 2012). For these reasons, threat of new entrant for McDonalds Corporation has been assessed as moderate. Threat of Substitutes Customers of McDonalds can buy food from foodservice counters or retail outlets but these foods lack the convenience factor associated with fast food services and this factor reduces threat of substitutes subsequently (Zwolak, 2010). Consumers can cook foods at home but majority of target market of McDonalds Corporation lack the convenience or time to cook food at home. With the rise of health consciousness, healthy food items and whole grain food items or frozen food items can act as potential substitute of fast food items offered by McDonalds (Hu and Xie, 2013). However, customers still go for hot fast-food items while they are in hurry to reach workplaces, colleges etc. Therefore, threat of substitute for McDonalds Corporation has been assessed as low (Hu and Xie, 2013). Competitive Rivalry McDonald’s and Burger King have established duopoly when it comes to selling burger items or hamburgers. Market share of McDonalds has been depleted due to fragmentation & hyper competition caused by presence of cross segment players like Pizza Hut, KFC and Domino’s that offers fast food related to fried chicken, pizza items and chilly preparations (Zwolak, 2010). In some segment, the competition is price based and companies like McDonalds invest money in service process in order to reduce value chain cost and reduce price of offering to further extent. Fast food companies can develop their capacity in low cost manner by opening franchise while most of them spending huge amount of money on advertising in order to strengthen brand position (Hu and Xie, 2013). For example, in 2009, McDonalds Corporation spent over $650 million on advertising and promotion to strengthen brand positioning. Overall, competitive rivalry in the industry has been assessed as high. 2.2 PEST Walker (2006) and Thompson, Strickland and Gamble (2007) used PEST framework to analyze macro environment. Political Due to health issues and rising concern among customers regarding ill health effects of fast foods have forced government of different countries and health authorities to put pressure on fast-food companies like McDonalds Corporation to describe nutritional value of the offering to customers. Political requirements like minimum wage specification, quality regulations, corporate governance norms etc create challenge for McDonalds to run business profitable. In other hands, quality norms created entry barrier and opportunity for companies like McDonalds Corporation to access government support by meeting the norms (Ibrahim, 2012). Economic Due to laggard effect of global economic crisis and rising unemployment rate, disposable income of customers has decreased and in order to counterbalance the reductions, customers curtailed their spending on dining and food product purchase. As result, customers shifted from spending money to high end and posh restaurants to low cost fast-food restaurants and QSRs. Therefore, companies like McDonald got the opportunity to cater demand of additional customers who are used to dine at high end restaurants. On contrary, as economic austerity measure, government of different countries have increased state-based sales tax on companies which created challenge for companies like McDonald to retain the price competitiveness (Zwolak 2010). Social Across the globe, fast-food eating habit related problems like childhood obesity, cardiovascular disease, diabetes etc are increasing at concerning rate. As a result, health awareness of customers is increasing and many among them rejecting high calorie fast-food and showing perchance for natural resource contained foods and vegetables. From other perspective, the existing situation can be classified as opportunity for McDonald to win customer trust by transparently revealing calorie content to customers and also achieve business growth by diversifying product portfolio by including salads, vegetables in food menu (Ibrahim, 2012). . Technological Latest technological developments such as RFID techniques, enterprise cloud sourcing, advent of social media marketing across different countries have created both challenge and opportunity for companies like McDonald to run business. On opportunity ground, McDonald is using digital marketing platform and social media networks like Facebook, Twitter etc to promote the brand to large set of young people in interactive manner. On challenge ground, digitalization has decreased cost of marketing for small companies and they are posing threat to companies like McDonald (Ibrahim, 2012). . 2.3 Porter’s Generic Strategy Elaboration Porter’s generic strategy reveals four strategic options for companies such as cost leadership, differentiation, cost focus on small segment and focus differentiation (Lynch, 2005, Marcus, 2005; Hitt, Ireland and Hoskisson, 2009). Priem (2007) and Ghobadian and O’Regan (2008) pointed out that relevance of these strategic models depends on their ability to provide competitive advantage to companies. In case of McDonalds Corporation, the company uses works closely with suppliers and integrate value chain activities in order to achieve “economies of scale” and decrease cost of offering at massive scale (Ibrahim, 2012). McDonalds Corporation uses ‘Cost Leadership’ as generic strategy in order to offer price benefits to customers as against competitors. Even in countries like India and China, the company restructured logistic functions and localized supply chain operation order to decrease cost of operation to further extent and pass on the price benefits to customers. 3.0 Cross-Culture Management Varian (1992) used micro-economic theories to understand competitiveness of industries and underline how economic condition of countries can create threat or opportunity for companies. On contrary, Barney and Arikan (2001) and Foss (2000) argued that companies also need to align cultural dynamics with strategic orientation in order to develop successful global strategy. Hofstede (1984 and 2001) differentiated cultures in different nations on the basis of five factors like power distance between different classes in society, uncertainty avoidance tendency, individualism versus collectivism, masculinity versus femininity and long-term versus short-term orientation. The researcher will use these five dimensions in order to cross cultural management of McDonald’s Corporation in different countries. Trompenaars and Hampden-Turner (1997) proposed seven dimension model which has similarity with Hofstede’s model. However, these two models will be conjointly used by the researcher in order to understand cross cultural management of McDonald’s Corporation in different countries. 3.1 Hofstedes Five Dimensions In order to highlight cross cultural segmentation, Hofstede (1984 and 2001) identified five factors like power distance between different classes in society, uncertainty avoidance tendency, individualism versus collectivism, masculinity versus femininity and long-term versus short-term orientation. McDonald has adjusted its business operation in context to all the five dimensions across different countries. Consideration of research works of Wu, Taylor and Chen (2001), Yang (2000) and Hofstede (1990) reveals the fact that cultural variance can greater for countries with different economic, social and value system. Power Distance In countries like UK, USA or Canada, McDonalds enjoy low power distance which means that society members are not dominated by power concentrated in the hand of limited numbers of social members and each social member has the freedom to speak their mind (Geert-Hofstede, 2014). However, there are other countries like Saudi Arabia, Turkey etc where power distance is high and for such countries, McDonalds Corporation promotes its food items for large group of customers and avoids promoting individualism theme (Ibrahim, 2012). Individualism Due to high individualism, in countries like Germany, Australia, New Zealand etc, target customers of McDonald in these countries depend very little on advice of family members regarding food choice and they tend to visit QSRs alone or with close friends. However, in countries like China, India, Sri Lanka etc, individualism is low and target customers of McDonald depend heavily on family advices and family value. As a result, McDonald launched vegetarian burgers (Mcaloo tikki) or egg- burgers in India because most of Indians avoid beef or meat burgers due to family values (Hu and Xie, 2013). Masculinity In countries like UK, Sweden etc, high masculinity score shows that social members of these countries driven by achievement, success and competition. As a result, McDonald uses champions and “best-in-their-field” icons to promote products while in South East Asian countries like Singapore, Philippines, low masculinity score shows that the society is driven quality of life as success parameter, caring and social bonding. In such countries, McDonald promotes family values, togetherness in marketing or use culture of empathy and quality of life within restaurants. Important thing to note that McDonald failed to make entry in countries such as Vietnam, Nepal, and Cambodia etc due to not only political reasons but also due to religious environment which do not support non-vegetarian eating habit. Uncertainty Avoidance Low uncertainty avoidance characteristics of citizens from Canada, Austria or Australia is showing that they are ready to experiment with new alternatives and ready to accept product innovation. Therefore, McDonald experiments with product menu in these countries while in MENA countries, customers prefer to avoid uncertainties and innovative product offerings. As a result, there are possibilities that customers from MENA countries may reject innovation in food menu or new food item offered by McDonald. As a result, McDonalds Corporation tend offer standardized and traditional food items in conservative countries in order to remain relevant among customers (Hu and Xie, 2013). Long-term versus Short-term Orientation In North American countries, due to normative orientation of the society, people are more concerned about immediate benefits instead of looking for long term benefits. Therefore, they are ready to eat fast-foods for satisfying immediate hunger despite knowing the ill effect of eating high calories food but. On contrary, in countries like Germany or East European countries like Bulgaria or Hungary, people look for long term benefits and ready to sacrifice high calorie food items that might satisfy their hunger but can cause long term health disease. In order to attract these set of customers, McDonalds Corporation tend to communicate their CSR actions in order to engage customers looking for providing benefits to unprivileged social members (Ibrahim, 2012). 3.2 Trompenaars Seven Dimensions Model Universalism versus Particularism In society blended with universalism, McDonalds Corporation tend to follow rules, regulation and standardization in stringent manner because people place more importance legal norms and regulations instead of human relations (Mind Tools, 2014). On contrary, South Asian countries, people believe rules can be changed on the basis of particularism of the situation. As a result, McDonald focuses more on relationship and societal marketing to attract customers. Individualism versus Communitarianism Same criterion has been already mentioned in “Individualism” section in the Hofstedes five dimension model. In case communitarianism driven society, McDonald tend to encourage customers to enjoy the food with groups and promote benefits family eating in QSRs. Specific versus Diffuse In case of specific dimension, people believe they can work together despite not having good relationship but in case of diffuse culture, people tend to mix work and personal lives (Mind Tools, 2014). However, for both dimensions, McDonald tends to adjust value offering such either offering individual buckets or combo food offer that can be enjoyed by group members. Neutral versus Emotional In case of neutral dimension, people tend to behave in diplomatic manner and seek reasons rather than relying on emotion while taking action (Mind Tools, 2014). In such culture, McDonald tends to communicate benefits to customers in detailed manner in order to influence their purchase action. In case of emotional dimension, people are driven by emotional feelings and assumptions rather sound reasoning. In such culture, McDonald tends to use emotional value and cultural sentiment in advertising to attract customers. Achievement versus Ascription Same criterion has been already mentioned in “Masculinity” section in the Hofstedes five dimension model. In case of Ascription dimension or in countries like France, Italy, Japan etc, people tend to emphasize more on behaviour of others as success parameters. In such context, McDonald emphasizes more on social activities or CSR activities in order to get respect from other customers. Sequential Time versus Synchronous Time Countries like Germany, UK are blended with Sequential Time dimension aspect of culture and people in these countries put high importance on punctuality and scheduled action (Mind Tools, 2014). In such context, McDonald tries to fasten its delivery operation in order to meet requirements of customers in timely manner. Countries like Japan, Argentina, and India are blended with Synchronous Time dimension aspect of culture and people in these countries prefer to work on multiple projects at a time and prefer flexible timing in activities. As a result, in these countries, McDonald tends to focus on promoting friendly culture and fun filling atmosphere within restaurants in order to engage customers. Internal Direction versus Outer Direction In countries like Australia, New Zealand etc, people are driven by internal direction and believe that they have the power to control surrounding environment (Mind Tools, 2014). As a result, in these countries, McDonalds Corporation promotes team working and work collaboration. In countries like China, Russia and others, people are driven by outer direction and believe that they need to work under the direction of external environment in order to achieve goals. As a result, in these countries, advertisements of McDonald often sound as mere assurance in order to boost confidence among target customers. 4.0 CSR of McDonalds Corporation According to Lazonick (2001), Hockerts (2008) and Blum-Kusterer and Hussain (2001), CSR can be viewed as activities of companies not directed for profit or revenue growth rather key objectives for these activities are providing benefit to stakeholders and ensuring sustainability of environment. While defining characteristics of CSR, Votaw (1972, p. 25) used the statement, ‘‘corporate social responsibility means something, but not always the same thing to everybody. To some it conveys the idea of legal responsibility or liability; to others, it means socially responsible behaviour in the ethical sense.” In such context, Brinckerhoff (2000), Crane and Matten (2003) stated that companies need CSR in order to provide value and benefits to stakeholders. There can be five types of stakeholders for companies such as shareholders, customers, suppliers, communities and employees (Drayton, 2002). Almost 60 years ago, Bowen (1953) was one of the first scholars who highlighted importance of corporate social responsibilities (CSR) for companies. According to Bowen (1953), companies have social responsibilities to provide benefits to stakeholders while incorporating CSR can help them to satisfy their social and ethical obligations. Ghobadian and O’Regan (2008) and Ghemawat (2002 and 2008) pointed out that importance of CSR for companies depend on three issues, 1- meeting shareholder requirements and gather access to additional funds due to good corporate images, 2- deliver values to stakeholders would help the business to establish long term relationship with stakeholders and company can derive business values from such long term relationship and 3- performing CSR initiatives help companies in getting support from governments that can facilitate business operation. Garriga and Mele´ (2004) and Van Marrewijk (2003) used stakeholder theories in order to define importance of CSR for companies. According to Van Marrewijk (2003), CSR activities help companies to deliver multitude of values to stakeholders, 1- shareholders get better return on their investment, 2- communities get social benefits, 3- suppliers get additional support from the company to deliver better supply, 4- customers get better product/services and 5- employees get collaborative work environment. As a result, long term relationship between companies and stakeholders gets created through incorporation of CSR initiatives. Subsequently, companies get opportunity to drive business growth by using the aforementioned strong and sustainable relationship with stakeholders. Stakeholder theories can best explain CSR activities of McDonalds Corporation such as ensuring well being of children by increasing vegetables or fruits in the food menu, providing detailed nutrition information to customers, educating supply chain partners reduce use of papers and carbon emission in activities, rolling out global forestry standards for packaging of goods, introduction of global packaging scorecard to measure carbon emission, decreasing waste or water usage in the operation, reducing carbon emission by 30% in value chain operation, recruiting employees from Hamburger University, enhancing employee value proposition (EVP), introduction of Ronald McDonald House Charities (RMHC) to offer financial or volunteer support to unprivileged segment in the society, providing low interest loans to farmers etc (McDonald’s Corporation, 2010). Nutrition and Well Being Growth of fast food industry has been further decreased due to rising concern of consumers regarding health risks regarding high calorie, high fat, sugar diet and salt content in fast food. In such context, in order to attract health conscious customers, McDonald’s Corporation and other fast-food companies included salads, vegetables, healthy food items in menu and started showing nutritional value to consumers for food items and decreased calorific value in each fast-food items. Consideration of research works of Van Assen, Van den Berg and Pietersma (2009) reveals the fact that companies can perform CSR activities by improving product quality and following quality norms of government while developing the item. In such context, McDonald’s continued adding new products, decreasing calorie content etc in the food menu in order to attract new customers and offer healthy food menu to children. For example, free fruits are being served with Happy Meals by the company in order to increase awareness among children regarding benefits of eating fruit and leverage fun among customers. Figure 1: Offering Menu Choice (Source: McDonald’s Corporation, 2010) The diagram is showing that the company is increasing serving of fruits with/market menu with each passing year and the statistics is self explaining that the company is putting significant effort to promote healthy eating habits. Globally, the fast food giant has launched animated online music videos in order to promote benefits of fruit and vegetable eating among children. For example, the company used the movie “Shrek Forever After” for co-branding the promotion of fruit eating habit in order to engage more children who love animation movies. Even in countries like Australia or New Zealand, the company is offering nutritional information to parents in order to help them to buy more healthy foods for children (McDonald’s Corporation, 2010). “Nutrition and Well Being” portion of CSR activities of McDonald’s Corporation should be criticized for issues like promoting food items in the name of nutritional offerings, trying to influence decision of children, not providing supply source information for food items to customers etc. Due to such negative factors, some legal organization and health institutes raised question about honesty in CSR activities of the company and negative words of mouth being generated. In such context, McDonald’s Corporation should try to use more refined ways such conducting parents seminar, knowledge session etc in order to communicate health benefits of fruit offering. Such initiatives would definitely help the company to generate confidence among external stakeholders and address legal issues. Sustainable Supply Chain In 2010, the company launched “Best of Sustainable Supply website” in order to highlight supply chain best practices and benchmark sustainability issues like using 100% natural beef meat, use Fair Trade certified vegetables, prohibit suppliers from using child labour, natural sourcing, decreasing water usage, increasing recycling and waste treatment etc. Figure 2: Sustainable Packaging (Source: McDonald’s Corporation, 2010) The above diagram is showing that the company is providing financial and technological resource support to suppliers in order to help them to reduce use of papers in packaging and increase use of recycled material in packaging. As part of global forestry policy, the company has directed suppliers to buy certified sustainable wood fibre in order to ensure sustainable practices. As part of ‘Sustainable Land Management Commitment’, McDonald’s Corporation encourages suppliers to use renewable raw materials, Eco-Filter global packaging etc. The company has established Global Energy Leadership Board (GELB) in order reduce energy usage in all the four verticals such as operations, building, equipment, and technology (McDonald’s Corporation, 2010). Although, the company has established target for reducing energy usage in franchisee and QSRs but due to presence of decentralized structure, it becomes almost impossible for the company to account energy data for each franchisee (McDonald’s Corporation, 2010). However, till now, the company has not incorporated critical issues like well defined green house gas reduction policy, carbon footprint reduction target, packaging weight reduction policy or integration of reverse osmosis technique in their CSR policies. Due to absence of these elements in CSR policies, the company is failing to meet the green house gas reduction target and environmentally sustainable benchmark being set by government. As a result, credibility of CSR activities of the company is being questioned by environmental agencies and policy makers. Subsequently, corporate reputation of the company is being negatively affected. In order to address the crisis situation, the company needs to restructure its environmental sustainability policy in order to build trust among stakeholders. Employee Benefits From employee benefit perspective, the company is focusing on recruiting Hamburger University-certified restaurant managers in order to ensure global practices. On the other hand, as part of employee value proposition (EVP), the company encourages culture of fun, team works and collaboration among team members and employees. It has been found by the researcher that CSR policy of the company does not have elements like educating unprivileged children in developing nations, women empowerment, community building, carbon footprint accounting, green supply chain etc. Absence of these elements increases vulnerability of CSR policies of McDonald’s Corporation and also creates doubt in the mind of stakeholders on honesty and transparency regarding CSR policies & ethical concern of the company. 5.0 Conclusion During recession, real household disposable income decreased and consumers stopped spending money on eating in fast food restaurants while they started buying low priced foods or vegetables and cooking them at home. Due to negative consumer sentiment, growth of the fast food industry was lower than 1% during 2007 to 2012 (Zwolak 2010). Although, the industry is fragmented with the presence of competitors like Yum! Brands, Inc, Wendy’s/Arby’s Group, Inc, Starbucks Corporation, Burger King Corporation etc but very few of these competitors compete directly within category. For example, Pizza Hut and Taco Bell, KFC are part of Yum! Brands, Inc and each of the sub brands cater different product segment. KFC specializes in fried chicken offerings while Pizza Hut specializes in Italian pizza items. Apart from these competitors, McDonald’s Corporation faces direct or indirect competitors like full service restaurants, frozen food items available in supermarket and independent sellers. Taking into account such internal and external environmental criterion, a brief SWOT analysis of the company can be done in the following manner. Table 1: SWOT Analysis Strength Weakness Strong brand reputation and global presence. Strong relationship with value chain partners and control over value chain activities. Volatility of financial performance. Increasing cost of operation and lack of control over overseas franchises. Opportunity Threat Diversifying product portfolio and add more nutritional food items. Expanding operation in BRICS nations. Existing financial volatility across global economy. Threat from same or cross segment competitors. (Source: McDonald’s Corporation, 2010) It has been found by the study that McDonalds Corporation has the opportunity to sustain its leadership position through strategic investment in BRICS nation and product diversification. The company has also invested significant amount of money on CSR activities and in future, it is expected that the company will expand its portfolio of CSR activities. It has also been found by the researcher that the company is quite successful in cross cultural management while expanding operation across nations. From marketing perspective, the Oak Brook QSR giant segments the market in terms of age, social-cultural structure, income level etc while the primary target market for the company includes young segment in the society such as teenagers, children, students, bachelors, young working professionals, families with children, couples etc who do not have access to much wealth to enjoy food at high end restaurants or do not ready to waste time in cooking healthy foods (Hu and Xie, 2013). McDonalds Corporation also uses its well furnished and youthful restaurants as part of promotional campaign and employ relatively young staff in order to send vibe of youthfulness to target customers. For example, young college students or office colleagues often visit McDonald restaurants for spending fun time or celebrating birthday or work achievements; such visits give the opportunity to the company for both cross selling and up selling. From strategic perspective, the fast food giant expands its business to those markets where customers actually value the “low cost offering” USP of the company and where future growth potential exists. For example, the company recently entered in Vietnam in order to give stiff competition to Burger King Worldwide Inc and tsp the growing market of fast food lovers (Business Day Online, 2013). At present, the company is focusing on expanding business in African countries like Nigeria, Sub-Saharan Africa countries which are showing more than 6% economic growth. Due to such growth opportunities, there are possibilities that more and more customers from the mentioned regions will have the desired disposable income level in order to afford fast foods of McDonald and other fast food companies. To be rational, one has to conduct longitudinal study in order to understand how multinational companies (MNCs) like McDonald operate or adjusts strategy over long course. 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