International Business Operations Of McDonald’s In Singapore: A Strategic Management Analysis

McDonald’s in Singapore

Discuss about the International Business for Strategic Management and Business Policy.
 

The process of internationalization or more commonly called by the name of globalization has impacted the business world in a significant manner (Hitt, Ireland and Hoskisson 2012). Thus, after the popularization of this particular concept in the later part of the 19^th century with the improvements made in the field of communication as well as the transport the style of conducting business of the various business enterprises has undergone significant change (Hitt, Ireland and Hoskisson 2012). Therefore, it is seen that the various business enterprises are no longer with their business operations in one particular area or region and try to be operational in diverse parts of the world. The process of being operational in several nations of the world entails with itself various kinds of benefits like increased customer base, the opportunity not to manufacture surplus products as well as services but at the same time getting the required market to sale these products and services, the means to use the technological advancements of the other nations of the world and several others  (Koh and Fraser 2014). These in short are some of the major reasons which have motivated the various business enterprises to become operational in the various nations of the world at the same time. This report will discuss about the international business operations of the American business enterprise McDonald’s in the nation of Singapore and the factors which affect their business operations in this particular nation. 

The business enterprise McDonald’s founded by “Richard and Maurice McDonald” in 1940 is an American fast food chain enterprise with food chains all over the world (Mcdonalds.com 2018). The enterprise was originally started as a single takeaway in the city of San Bernardino and focused only on providing hamburgers as well as sandwiches to the customers of the city (Mcdonalds.com 2018). The McDonald brothers focused on providing fast as well as quality services to the customers and this is one of the major features which attracted the attention of Ray Kroc to the outlet. Many experts are of the viewpoint that the real growth of the fast food chain began with the introduction of Kroc to the enterprise (Wheelen et al. 2017). Therefore, with his effective leader as well as his innovative strategies within a very short time the enterprise became a very profitable one while being able to serve a much larger customer base than it had been able to serve under the leadership of McDonald brother. Thus, the business enterprise at the current moment is the largest fast food enterprise on a global basis in terms of the annual profit generated by it while being the 2^nd largest private employer of the world (Mcdonalds.com 2018). The one outlet chain started by the McDonald brothers was transformed into a global fast food chain under the leadership of Kroc and thus currently it is seen that the enterprise is operational in most of the major nations of the world. Furthermore, the traditional food menu offered by the enterprise has also undergone various changes and it is seen that the enterprise currently offers food items as per the food preferences of the people of the nation in which they are operational. The enterprise is the 11^th largest business organization of the world in terms of the annual profit gained by it, that is, $106.4 billion for the year 2017 (Forbes.com 2018). The recent financial data of the enterprise is being provided by the below given figure-

PESTLE Analysis

The enterprise opened its first outlet in the nation of Singapore in the early part of the 21^st century because of the internationalization which it had embarked upon (Mcdonalds.com 2018). The enterprise initially followed the American model which had formed the central fulcrum of its success in the nation of America. However, soon the enterprise modified its business model as per the culture of the nation of Singapore. Furthermore, the introduction of the McDelivery system in 2010 further enhanced the prospects of the enterprise in a significant manner (Mcdonalds.com 2018). The enterprise offers a wide range of food items to the customers of Singapore depending on the food preferences which they have and some of the most popular food items offered by them are “Red Rice Porridge, BBQ Beef Burger with Egg, Strawberry Shortcake McFlurry, Double Cheeseburger, Garden Side Salad” and others (Mcdonalds.com 2018). These items offered by the enterprise have been much appreciated by the people of the nation and it is a reflection of this particular fact that the enterprise within a very short one has become one of the most popular ones of the nation.

The macro as well as the micro wields a considerable amount of influence on the business process of a particular enterprise and thus it becomes of vital importance for the various business enterprises to take into effective consideration these factors (Srdjevic, Bajcetic and Srdjevic 2012). Furthermore, the macro as well as the micro environments in which a particular business enterprise is operational provides a lot of valuable information like the key competencies, weaknesses and other important factors which the enterprise needs to take into consideration for the process of their business (Srdjevic, Bajcetic and Srdjevic 2012). A PESTLE analysis of the business enterprise McDonald’s in the nation of Singapore would reveal the following facts-

The above mentioned factors are likely to affect the business process of the enterprise McDonald’s in the nation of Singapore in a significant manner and thus it becomes imperative for the enterprise to take into effective consideration these factors for the process of their business operations in the nation of Singapore. For example, the enterprise can utilize the stable political as well as the economic climate of the nation in a effective manner to further enhance the prospects of their business in the concerned nation.

There are several fast food chains operational in the nation of KFC, Pizza Hut and others (Schlosser 2012). Most of these enterprises take the help of various kinds of innovative strategies as well as measures for the conduct of their business in the nation of Singapore and also to provide effective services to the customers (Hamilton and Webster 2015). Therefore, it can be said that the enterprise under discussion here faces a high level of rivalry from the other companies operational in the same field of business. 

The enterprise under discussion here is one of the most reputed ones of the world and has been in operations for more than 50 years (Schlosser 2012). Furthermore, the brand image of the enterprise is a positive one and it also provides very attractive offers to the customers. Therefore, it can be said that the enterprise faces a very low level of threat from the new entrants in the same field of business.

The organization faces a high level of competition in the fast food market of Singapore. However, the enterprise tries to overcome this high level of competition by offering various kinds of attractive as well as discounted offers to the customers. Therefore, it would be apt to say that the enterprise faces a moderate level of threat from the substitutes.

The enterprise under discussion here takes the help of multiple suppliers for the process of their business operations in the nation of Singapore (Schlosser 2012). This not ensures that the enterprise gets timely delivery of the raw materials which are needed for the effective conduct of their business but at the same it ensures that the enterprise procures the raw materials needed for its business at a very low rate. Therefore, it would be apt to say that the bargaining power of the suppliers associated with the enterprise is very low.

There are a number of fast food chains operational in the nation of Singapore like KFC, Pizza Hut and others and they offer almost similar kinds of food items to the people of the nation. Furthermore, these enterprises in order to mitigate the high level of competition faced by them take the help of various kinds of effective strategies to provide quality provide services to the customers (Schlosser 2012). Therefore, it can be said that the bargaining power of the customers is very high as the number of choices which are available to them is more.

The enterprise can take the help of the strategy of cost leadership to provide quality food products to the customers from the different parts of the nation and that too at very affordable prices (Hill, Jones and Schilling 2014). Furthermore, this particular strategy is also likely to help the enterprise to mitigate the high level of market rivalry faced by it.

The enterprise can also take the help of the strategy of product differentiation which will enable the enterprise under discussion here to offer food items to the customers which are different in terms of taste from the food items provided by the other companies operational in the same field of business (Hill, Jones and Schilling 2014).

The strategy of “product adaptation” is another strategic option which is available to the enterprise under discussion here. This particular strategy is likely to help the enterprise to offer food items to the customers which are manufactured taking into effective consideration the eating habits as well as preferences of the customers (Hill, Jones and Schilling 2014).

The “omni- channel business strategy” is another one which the enterprise can take the help of for the process of their business. This particular strategy will help the enterprise to provide online services to the customers. Thus, the customers will be able to order the food items through the electronic media which would be delivered at their door steps through the means of the delivery system used by the enterprise (Eden and Ackermann 2013).

Conclusion

To conclude, the macro as well as the micro environments in which a particular enterprise is operational wields a considerable amount of influence on the business process of the concerned business enterprise. Thus, it is generally seen that the various business enterprise take the help of various kinds of situational analysis tools to not only analyze the business environment in which they are operational but also to devise effective strategies for the mitigation of the threats faced by them. 

References

Barney, J.B., 2014. Gaining and sustaining competitive advantage. Pearson higher ed.

Chen, M.F. and Huang, C.H., 2013. The impacts of the food traceability system and consumer involvement on consumers’ purchase intentions toward fast foods. Food Control, 33(2), pp.313-319.

Chiu, S.W.K., 2018. City states in the global economy: Industrial restructuring in Hong Kong and Singapore. Routledge.

Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management. Sage.

Forbes.com. 2018. Forbes Home [online] Available at: https://www.forbes.com/companies/mcdonalds/ [Accessed 2 Jun. 2018].

Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University Press, USA.

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases: competitiveness and globalization. Cengage Learning.

Koh, N.K. and Fraser, B.J., 2014. Learning environment associated with use of mixed mode delivery model among secondary business studies students in Singapore. Learning Environments Research, 17(2), pp.157-171.

Mcdonalds.com. 2018. McDonald’s: Burgers, Fries & More. Quality Ingredients.. [online] Available at: https://www.mcdonalds.com/us/en-us.html [Accessed 2 Jun. 2018].

McDonald’s®. 2018. Home – McDonald’s®. [online] Available at: https://www.mcdonalds.com.sg/ [Accessed 2 Jun. 2018].

Schlosser, E., 2012. Fast food nation: The dark side of the all-American meal. Houghton Mifflin Harcourt.

Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria decision making based on SWOT/PESTLE analysis: a case study of reconstructing a water intake structure. Water resources management, 26(12), pp.3379-3393.

Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business policy. Pearson.

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