Economic Analysis Exercise Walmart and Mcdonalds

Assignment #5: Economic Analysis Exercise

1. Compare and contrast McDonald’s strategies in China with those of Wal-Mart in Mexico.

McDonald’s has accelerated expansion in China more so than any other country and plan to open close to 200 stores this year (Gasparro, 2011). By raising profits and introducing new products, McDonald’s spends millions of dollars a year to perfect the famous French Fries that are on the menu (Lars, n.d.). McDonald’s views China as a major stepping stone towards expansion. In order for a business to be successful overseas the company should have a growth strategy, the timing must be right, and the appropriate market should be selected. The company should learn about cultures, foreign exchanges, and global ethics. Products differ greatly between different markets and a business must be mindful to tailor to the specific country. Traditions of that country must be respected, and core values must be adhered to (Hult, n.d.). A business should understand the concept of food marketing. In the food market environment, sociological factors, government regulations, competitive conditions, and economic cycles should be adhered too. China in particular has seen a booming population with a large percentage of the population being young, which stimulates economic growth. Products tailored toward this generation will make economic profits boom (Lars, n.d.). McDonald’s listened to the Chinese people and tailored the menu around the voice of the consumer. By keeping the basics in China, not creating fanciful dishes, and providing the most courteous service, McDonald’s has seen tremendous success in China (Jie, 2008). Opening drive throughs was a way to hit an untapped market because of changing lifestyles, and the culture of driving automobiles (Farnham, 2010). Wal-Mart has tremendous success in Mexico and is a top supplier and merchandiser in the country. Wal-Mart acquired the Grupo Cifra, which is a local domestic...